TaxTMI 
TaxTMI 
2016 (8) TMI 8
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....004 and would not be questioned in view of their distribution having been made from the same entity s identity (ILTD, being their own division) of the same company-appellant (legal entity).The ILTD having been duly registered under Rule 2(m) read with Rule 7 of the Cenvat Credit Rules and having distributed eligible input service credit under Rule 2(l), denial of credit was erroneous. * The Leaf Tobacco Division (ILTD) being the Input Service Distributor (ISD) of the very same company which owns and runs both the division and the factory, the Ld. Lower authority was in grave error in treating the ILTD as a separate entity. This grave error vitiates the show-cause notice dated 3.2.2011 and the impugned order which has no legs to stand upon in law. * The Ld. Lower authority has grievously erred in not appreciating that the same legal entity (appellant) had been granted a registration as ISD under the Cenvat Credit Rules as evident from p.62 of the appeal petition which enumerated the name of the entity, its identity at Guntur as Leaf Tobacco Division apart from the addresses of various premises to which the credit was to be distributed that included the address of t....
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....in Guntur which distributed the credit and received invoices prescribed by Rule 4A of the Service Tax Rules, 1994 which were eligible for distribution. The Respondent has failed to take cognizance of Rule 2(m) and Rule 7 of the Cenvat Credit Rules which deal which definition of ISD and manner of distribution of credit. The entire proceedings are based on faulty perception of facts and law. In this connection, the appellant relies on the decision of the apex court in Goa Urban Cooperative Bank Ltd. vs. Noor Mohammed Sheik Musha and Anor, AIR 2004 SC 3886. It was held that the word office should be understood in the sense in common parlance/dictionary understands it. In para 15/16 ibid the Court held that contextually an office is a place or a building used for business or for conducting office work, regular transacting of business or performance of particular service. It would include a room, set of rooms or buildings used for business, clerical or administrative work. So as also the word godown was explained in para 14 ibid and the word warehouse in para 20. The Ld. Lower authority has brushed aside the above understanding in law of the word office. The order is therefore untenable....
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....ut services in question as ILTD, Guntur is not the same as the appellant viz., ITC Ltd., Bangalore. * Input Service Distributor, ILTD, Guntur is not manufacturing any excisable goods. * Input services do not have direct or indirect nexus in relation to manufacture of final product. * To support his submissions, he relied on the following case laws: i. Fosroc Chemicals India Pvt. Ltd. vs. CCE, Bangalore-LTU: 2016 (42) S.T.R. 28 (Tri.-Ban.) ii. Mahindra & Mahindra Ltd. vs. CCE, Pune-I: 2013 (31) S.T.R. 667 (Tri.-Mumbai) 4. We have carefully considered the facts on record as well as the submissions of both the sides. 5. We find that for the identical facts, Revenue in two orders has dropped the proceedings against the appellant. One order in this regard has been passed by Additional Commissioner of Central Excise, Bangalore-II Commissionerate vide Order-in-Original No.49/2013 dated 29.11.2013 and another is passed by Commissioner of Central Excise (Appeals-I), Bangalore vide Order-in-Appeal No.44-45/2014-CE dated 31.1.2014. In both these orders, the appellant has been found to be eligible for claiming CENVAT credit in case of the cred....
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....e 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. 5.2.1 The Revenue s argument is that ILTD, Guntur is not paying either Central Excise duty or any service tax. In other words, Revenue s argument is that Input Service Distributor viz., ILTD, Guntur is not a Revenue paying entity and that is why it is covered under the provisions of Rule 7(b) above; therefore it cannot distribute the CENVAT Credit in respect of service tax paid on input services used by them. Revenue here is completely wrong in treating ILTD as a separate entity with reference to the appellant viz., ITC Ltd. In fact ILTD and ITC are one and the same; only as a matter of structuring and in order to have proper functioning with reference to the appellant s manufacturing operations, the appellant has carved out ILTD as its Division. In order to find out if the operations being conducted by ILTD Guntur are within the mischief of Rule 7(b) of CENVAT Credit Rules , we have to find out whether ITC as a whole is exclusively engaged in the manufacture of exempted go....
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....ories. Therefore the services cannot be attributed to goods which are exempted and there is n evidence on record to show otherwise. I find that services storage up to the place of removal and procurement of inputs are specifically covered under definition of input service ................. 5.3.2 We also take support from the decision of Hon'ble Karnataka High Court in the case of CCE vs. Ecof Industries Pvt. Ltd. (supra). The Hon'ble Karnataka High Court in the said case inter alia observes as follows: "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 to suc....