Appellant entitled to full CENVAT Credit for Sponsorship Service used at Akurdi unit

The appellant availed CENVAT Credit for Sponsorship Service at their Akurdi unit, leading to a dispute over the distribution of credit between Akurdi and Pithampur units. The Tribunal ruled in favor of the appellant, stating that the absence of provisions during the relevant period did not mandate proportionate credit distribution. As the service was solely used at the Akurdi unit, the appellant was entitled to the entire credit. The appeal was allowed, overturning the denial of credit by the adjudicating authority and Commissioner (Appeals).

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Issues:
1. Availing CENVAT Credit for Sponsorship Service
2. Distribution of credit between multiple units

Analysis:
1. The appellant availed CENVAT Credit for Sponsorship Service, specifically for brand promotion at their Akurdi unit. The department contended that since the brand promotion was for both Akurdi and Pithampur units, proportionate credit should have been taken for both units. The adjudicating authority and Commissioner (Appeals) upheld the denial of the entire credit. The appellant argued that as the service was received only at the Akurdi unit, the entire credit should be admissible there. They highlighted the absence of any provision for distributing credit to multiple units during the relevant period of April 2012 to March 2014 under the CENVAT Credit Rules, 2004. They cited the case law of Ecof Industries Pvt. Ltd. and Greeves Cotton Ltd. to support their position.

2. The key issue was whether the appellant could avail proportionate credit for the sponsorship service received for brand promotion. The Tribunal noted that no provision existed during the material period for distributing input service credit on a proportionate basis to multiple units. The introduction of Notification No. 13/2016-CE(NT) on March 1, 2016, allowed for such distribution based on turnover ratio if the service was used commonly by all units. Citing the judgment of the Hon'ble Karnataka High Court in Ecof Industries Pvt. Ltd., the Tribunal emphasized that there was no legal requirement for the unit that paid the tax to be the sole beneficiary of the credit. The Tribunal concluded that the appellant was entitled to the entire credit as the service was used solely at the Akurdi unit. Therefore, the appeal was allowed, setting aside the impugned order.

This detailed analysis of the judgment showcases the legal arguments, relevant case laws, and the Tribunal's reasoning behind allowing the appeal regarding the availing of CENVAT Credit for Sponsorship Service and the distribution of credit between multiple units.

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