2018 (5) TMI 1511

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.... credit rules, distributes the credit of the input services of commonly used between three units. It was detected during the audit that the ISD i.e. Head Office of the assessee has distributed the input service credit wrongly between the units inasmuch as they should have distributed it proportionate to the turnover of different units but they transferred excess transfer of Rs. 3,82,704/- on common services to the appellant based in Hyderabad. When this was pointed out by the audit, the appellant reversed the credit alongwith applicable interest. 2. A show cause notice was issued on 08.08.2015 by the Dy. Commissioner seeking to recover the excess credit and interest and appropriate the amounts already paid by them. It is also proposed in t....

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....dit and take credit. It is for the ISD i.e. their Head Office to distribute the credit appropriately and once the ISD issues an invoice, they can take credit on it. But for the Audit neither the Officers nor the appellant would have come to know that an excess amount of credit was utilised. Therefore, there is no violation of any Act or Rules by them in taking the credit on the basis of the ISD invoice issued by their Head Office. Violation, if any, is on the part of their Head Office which is registered as an Input Service Distributor. The allegation is that the appellant that the wrongly availed excess credit on the basis of the invoice of their Head Office. When the audit pointed out the same, they have reversed not only the excess credi....

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....the appellant would know his own turnover as well as the group turnover and therefore they know the proportion of credit he is entitled to. Accordingly, he should have taken the credit proportionately and not in excess. The Officers of the Department are definitely not expected to know the turnover of the company and of each unit. This burden rests on the appellant in self assessment scheme when all powers have been given to the assessee to assess and pay duties and take credit. They have not fulfilled this requirement and the appellant has thus violated Rule 7(d) of Central Excise Rule 2004, which reads as follows: "the credit of service tax attributable as input service to all the units shall be distributed to all the units pro rata on ....