TaxTMI 
TaxTMI 
2016 (1) TMI 21
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....cated at Kuluvanahalli, Ankleshwar and Rudrapur. They have registered themselves as Input Service Distributor (ISD) in their office located at Bangalore. The ISD is availing the CENVAT Credit of service tax paid on various services received by them which are being used in all the three units. Whereas the units located at Kuluvanahalli and Ankleshwar are paying duty of excise on their final product, the unit at Rudrapur is enjoying the exemption in terms of area based exemption Notification No. 50/2003. The ISD has distributed CENVAT credit so availed to their two units located at Kuluvanahalli and Ankleshwar. 2. As a result of the audit conducted in their factory, it was found that the services which have been used at their Rudrapur Unit....
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....e, I find that there is no dispute on the factual position. Admittedly the appellant ISD has availed credit in respect of services which were either exclusively used in the Rudrapur or were partially used there. Further, Rudrapur is an exempted unit in terms of area based exemption notification. The provisions of CENVAT Credit Rules governing distribution of CENVAT Credit of an ISD are contained in Rule 7 of CENVAT Credit Rules 2004, and are being reproduced below for better appreciation. "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 s....
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.... not available. The expression 'exclusively' appearing in the said Rule relates to the unit and not to the service tax. The unit has to be exclusively engaged in the manufacture of exempted goods meaning thereby that if service tax stands utilized in a unit which is manufacturing exempted as also dutiable goods, the said Rule will have no application. The expression "exclusively" is not associated with the word "service tax" as suggested by the learned advocate. It is well settled law of interpretation that where the words of a particular provision is unambiguous, no extraneous words can be introduced or taken out or can be allowed to switch places. As such, the expression "exclusively" cannot be associated with the service tax avai....
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....upees, whichever is greater. (2) In a case, where the CENVAT credit in respect of input or capital goods has been taken or utilised wrongly on account of fraud,wilful mis-statement, collusion or suppression of facts, or contravention of any of the provisions of the Excise Act, or the rules made thereunder with intention to evade payment of duty, then, the manufacturer shall also be liable to pay penalty in terms of the provisions of section 11AC of the Excise Act. (3) If any person takes CENVAT credit in respect of input services, wrongly or in contravention of any of the provisions of these rules in respect or any input service, then, such person, shall be liable to a penalty which may extend to an amount not exceeding two thousand r....
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....f the Excise Act, or of the rule made thereunder with intent to evade payment of duty, then, the manufacturer shall also be liable to pay penalty in terms of the provisions of [clause (c), clause (d) or clause (e) of sub-section (1) of section 11AC of the Excise Act.] (3) In a case, where the CENVAT credit in respect of input or capital goods or input services has been taken or utilized wrongly by reason of fraud, collusion or any wilful mis-statement or suppression of facts, or contravention of any of the provisions of these rules or of the Finance Act or of the rules made thereunder with intent to evade payment of service tax, then, the provider of output service shall also be liable to pay [penalty in terms of the provisions of ....