2017 (9) TMI 272

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....t Hyderabad. There is another factory of the same appellant located at vizag manufacturing the same product. The corporate office is registered as an input service distributor and took Cenvat Credit in respect of input services issued in the name of Corporate Office and distributed the credit to various units under ISD invoice. The present dispute covers the period September 2008 to July 2012 wherein the appellant availed Cenvat Credit on the basis of such ISD invoices. During the impugned proceedings the Department sought to deny the Cenvat Credit in respect of these ISD invoices issued in favour of the appellant but in respect of which services were utilized wholly in the Vizag unit. The adjudicating authority, vide the impugned order, or....

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....ion of the statutory provisions during the above periods we reproduce the relevant rule 7 of the Cevnat Credit Rules: For September 2008 to 31.03.2012 "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 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 sh....

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....buted in a unit exclusively engaged in the manufacture of exempted goods or providing of exempted services. 9. In fact, the Board has issued a circular clarifying in this regard, which is extracted by the tribunal at para 7 which reads as under :- "Para 7. Para 2.3 of the Master Circular referred to by the ld. Advocate reads as under :- "2.3.- An "Input service distributor" is an office or establishment of a manufacturer of excisable goods or provider of taxable service. It receives tax paid invoices/bills of input services procured (on which Cenvat credits can be taken) and distributes such credits to its units providing taxable services or manufacturing excisable goods. The distribution of credit is subject to the condition....

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.... only to that unit. Consequently, such credit cannot be distributed to Bhilai unit of the appellant. In view of the above, the demand is to be sustained for the period 01.04.2012 to 30.06.2012. 12. W.e.f. 01.07.2012, sub rule 7(d) has further been introduced which provides for pro rata distribution of credit on the basis of turnover of the concerned unit to the total turnover of all the units. The CBEC circular dated 11.07.2004 was issued after introduction of sub rule 7(d) wherein it has been clarified that the distribution for the purpose of rule 7(d) will be done in this ratio in all cases irrespective of whether such common input services were used in all or some of the units. In the light of sub rule 7(d) we are of the view that ser....