2019 (3) TMI 1046

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....record, it was observed by the Department that the appellant has availed cenvat credit on the basis of invoices issued by input service distributor (ISD) who have been passing the credit of service tax paid on services which have no relation with the manufacture of soap. Accordingly, several SCNs as mentioned below were served demanding the recovery of the respective inadmissible cenvat credit alongwith the interest and the penalties (cenvat credit reversed) The main defence of the appellant before the Department had been that the maximum cenvat credit has been reversed. The details are as follows: Sr. No. SCN No./ Statement of demand no and date Period Cenvat credit amount involved Cenvat Credit Reversed 1. V(34)15-....

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....er 2014 to March 2017 was confirmed and the respective penalty was reduced to Rs. 23,68,610/- instead of Rs. 48,88,110/-. The Appeal was accordingly modified as partly allowed. Still being aggrieved, the Appellant is before this Tribunal. 2. I have heard Mr. Ghanshyam Giri, Ld. Advocate for the appellant and Ms. Tamana Alam, Ld. DR for the Department. 3. It is submitted on behalf of the appellant that the demand even to the extent of Rs. 44,33,290/- has wrongly been confirmed as an amount of Rs. 47,11,370/- already stands reversed by the appellant (Rs.44,23,022/- has been reversed by the ISD and remaining by the factory locations) that too even before the issuance of the SCN. No question of any demand in the circumstances at all arise....

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....struction services which are not the eligible inputs for availing credit distrubtion thereof by ISD has no meaning. Appeal is accordingly prayed to be dismissed. 5. After hearing both the parties and perusing the record, I observe that initially six SCNs as detailed above were served upon the appellant demanding the recovery of the cenvat credit distributed by their ISD alleging the same to be inadmissible credit. The total recovery was Rs. 56,70,178/-. Commissioner(Appeals) has dropped the entire demand except for the demand with respect to the first SCN dated 15.01.2015 that too for an amount of Rs. 44,33,290/- alongwith the penalty of Rs. 23,68,610/- alleging the same to be ineligible input for the credit being the construction activi....

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....pt for the demand of 1st SCN for reversal of credit of Rs. 44,33,290/-. It becomes clear that the amount reversed satisfy the demand even of SCN dated 15.01.2015 alleging the construction services to be ineligible input. To my opinion Department was not justified for confirming the said demand. Amount stands already reversed though by the ISD. Tribunal Ahmedabad in the case of Castrol India Limited Vs. Commissioner of Central Excise, Vapi reported in 2013 (30) S.T.R. 214 (Tri.-Ahmd.) while discussing Rule 2(m) of CCR defining input service distributor (ISD) and Rule 2(i) defining input services has held that denial of credit distributed by input service distributor is not justified when the credit distributed against the documents referred ....