TaxTMI 
TaxTMI 
2016 (5) TMI 1047
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....n in their Hinjewadi unit, both the lower authorities have disallowed the Cenvat Credit on the ground that the services were not received by the appellant unit at Hinjewadi whereas it was received at Pirangut unit and Wai unit, these two units are not registered. They are neither manufacturer nor providing any service and not paying excise duty or service tax. Aggrieved by the impugned order the appellant filed this appeal before me. 3. Shri Prasad Paranjape, Ld. Counsel appearing for the appellant submits that the appellant is engaged in the manufacture of excisable goods and discharging the excise duty thereon. The Hinjewadi unit where the Services of Security and Fettling Contract Services were received are carrying out job work of the appellant unit under Rule 4(5)(a) of Cenvat Credit Rules 2004. Therefore, the services received by Hinjewadi unit is deemed to have been used in or in relation to manufacture of the final product on which excise duty is paid by the appellant unit. As regard Wai unit, it is newly setting up unit where the architectural services were received, this unit is also part of the appellant company only. All the expenditure of both the above units in res....
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....ardik Founders and Engineers (P) Ltd. Therefore appellants other unit cannot be treated as different from the appellant. Even though there are three units but the business activity of the appellant is only one i.e. manufacturing of excisable goods at appellant factory and clearance thereof on payment of excise duty. As regard Hinjewadi unit is concerned they are carrying out the job work activity on the product which is subsequently cleared as a final product on payment of duty by the appellant unit. Therefore the services received and used by Hinjewadi unit is used in relation to part of the manufacturing process of appellant unit. Therefore, the services deemed to have been used in or in relation to manufacture of final product of the appellant. As regard Wai unit, it is a newly setting up unit though this unit is not started but it is in connection to the business activity of the appellant company and the business activity, needless to say is an activity of manufacturing of final product. All the expenditures in respect of subject input service were booked as expenditure against the overall business activity of the appellant company. Cenvat Credit in respect of the input service....
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....ur. As the said tax has not been paid in connection with the input used in manufacture of products at Malur unit or in the advertisement or production at Malur Unit, the assesse is not entitled to the benefit of CENVAT credit under the rules. The lower Appellate Authority has rightly held so which order has been erroneously set-aside by the tribunal and therefore he submits a case for interference is made out. 4. Per contra , the learned Counsel for the assessee submits that the definition of input service and input service provider read with Rule 3(1) and Rule 7(1) of the Rules makes it very clear that it is not the requirement of law, that the unit, which has paid the tax alone, is entitled to the benefit of the credit under the scheme. If a manufacturer has several units and has paid input tax, he is expected to register himself as a input service distributor, collect all these taxes paid and thereafter distribute the same to its various units except to two conditions which are mentioned in Rule 7. Therefore, he submits that there is no reason for interfering with the order passed by the tribunal, which is strictly in accordance with law. 5. In the light of the aforesaid f....
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....l products or provider of output service, which receives invoices issued under rule 4A of the Service Tax Rules, 1994 towards purchases of input services and issues invoice, bill or, as the case may be, challan for the purposes of distributing the credit of service tax paid on the said services to such manufacturer or producer or provider, as the case may be;" 7. Rule 3(1) has been defined as under :- "A manufacturer or producer of final products or a provider of taxable service shall be allowed to take credit". 8. It is in this context, the definition of input service distributor makes it clear that a manufacturer or a producer of a final product or a provider of output service may have more than one unit and may be distributed in various parts of the country. It is in this background the definition of service distributor is defined as office of the manufacturer or producer of a final product or provider of output service which receives invoices issued under Rule 4A of the Service Tax Rules, 1994 towards purchases of input services and issues invoice, bill or, as the case may be, challan for the purposes of distributing the credit of service tax paid on the said services ....