2017 (4) TMI 946

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...., Information Technology Software, Renting of Immovable property, Manpower Recruitment Agency service and Business Auxiliary service. They are registered as STPI unit and are filing service tax returns. The appellants are availing CENVAT credit on input services. During the course of audit, it was noticed that for the period April 2011 to March 2013, the appellant availed credit of Rs. 22,84,172/- on invoices issued by their ISD-Mumbai Office mentioning as 'CMC Ltd-Hyderabad, R&D'. The department entertained a view that since the invoice is issued to the appellants R&D unit, the same is not eligible for credit on the ground that R&D unit is not providing any output service. After due process of law, the original authority confirmed ....

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....not considered at all. The Ld. Counsel adverted to Rule 7 of CENVAT Credit Rules 2004, which provides the rule regarding the manner of distribution of credit. The said rule has undergone an amendment w.e.f. 01.04.2012. That even prior to amendment as well as after amendment, the condition imposed in Rule 7 is that the credit of service tax attributable to service used in a unit exclusively engaged in manufacture of exempted goods or providing of exempted services shall not be distributed. That the R&D building is only a part of the appellants unit and the same cannot be taken as a single one to deny the credit stating that there are no services provided by the R&D unit. The Ld. Counsel also relied upon the decision in the case of CC&CE, Ind....

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....our buildings) of the appellant which is situated in the registered premises. There is no dispute with regard to the invoices distributed to the STPI buildings. The dispute is raised with regard to the invoices issued mentioning 'R&D'. It is the case of department that this 'R&D' building is a separate unit and as there is no output service provided from this building/unit, the credit is not admissible in terms of clause(b) of Rule-7 of CENVAT Credit Rules and Explanation to Rule 7 of the CENVAT Credit Rules, 2004. The Ld. Counsel has furnished the Lay Out Plan of the premises and it is seen that the buildings are situated in one premises for which only one registration is taken for various categories of services provided by....