TaxTMI 
TaxTMI 
2014 (11) TMI 33
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....ral Excise Act as also been imposed. 2. The brief facts of the case are that the appellant is engaged in the manufacture of equipment, machinery etc. required for distilleries, breweries, and ethanol projects at their manufacturing units situated at Khed and Sanaswadi. Khed unit is 100% EOU unit. Sanaswadi is a DTA unit. The Head Office is situated at Pune and the same is registered with department as input service provider during the period June 2006 to April 2008. The appellant received the services of commission agent located overseas for procuring the orders for goods manufactured by the appellant for their EOU unit. Based on the procurement of the purchase orders, the appellant exports the final product manufactured by them. The app....
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....on of penalty was also made. The sole allegation in the show-cause notice is that the input service were received by the EOU unit therefore, the same cannot be input service for DTA unit and credit of same is not admissible to DTA unit. The show-cause notice was adjudicated and converted into an impugned order. Aggrieved from the said order, the appellant is before us. 4. The ld. counsel for the appellant submits that the appellant is having two units one DTA and other EOU unit. The service tax has been paid at their head office located in Pune and registered as input service distributor. As the service tax of both the units have been paid by head office, therefore as per Rule 7 of the CENVAT Credit Rules, 2004, the Head office has corre....
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....the appellant was entitled to take Cenvat credit. Further Rule 7 of the CENVAT Credit Rules, 2004 has been amended vide Notification 18/2012-CE (NT) dated 17.03.2012 and Notification 28/2012-CE (NT) dated 17.03.2012 which is evident that during the impugned period, the appellant has taken Cenvat credit correctly and there was no bar to avail Cenvat credit pertaining to EOU unit by the DTA unit. In these circumstances, it is prayed that the extended period of limitation is not invocable and in this case whole of the demand has been proposed to be confirmed by invoking the extended period of limitation. Therefore, the impugned order is required to be set aside. 7. On the other hand, ld. AR drew our attention to the show-cause notice and su....
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....vice for the head office. Therefore, now we have to see whether head office has correctly transferred the credit or not. To transfer the Cenvat credit by head office to various units has been provided through Rule 7 of the CENVAT Credit Rules, 2004. 10. Therefore, we have to look into Rule 7 of CENVAT Credit Rules, 2004 for distribution of input service credit. 11. Rule 7 is reproduced as under:- "Rule 7. Manner of distribution of credit by input service distributor . - The input service distributor may distribute the CENVAT credit in respect of the service tax paid on the input service to its manufacturing units or units providing output service, subject to the following conditions, namely:-  ....
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.... Manner of distribution of credit by input services RULE 7. Distributor. - The input service distributor may distribute the CENVAT credit in respect of the service tax paid on the input service to its manufacturing units or units providing output service subject to the following condition, namely:- (a) the credit distributed against a document referred to in rule 9 does not exceed the amount of service tax paid thereon; or (b) credit of service tax attributable to service use in a unit exclusively engaged in manufacture of exempted goods or providing of exempted services shall not be distributed. 7. P....
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....ing the distribution of the Service Tax credit made in respect of the Malur Unit on the ground that the services were used in respect of the Cuttack Unit finds no mention in the relevant rules. As such, restricting the distribution of Service Tax credit in a manner as has been done by the impugned order by the lower appellate authority (original authority had approved of such distribution) cannot be upheld. In case the Department wants to place such restriction as is sought to be placed in the case, the rule is required to be amended." The view of the Tribunal was been affirmed by the Hon'ble High Court of Karnataka (supra). Therefore, we hold that the appellant is entitled to take Cenvat credit during the impugned period as distr....