TaxTMI 
TaxTMI 
2019 (7) TMI 257
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....ervices; that the ISD credited such payment to the appellant's Cenvat credit account and then distributed the same to its various manufacturing units; that the appellant at its ISD office availed Cenvat credit on service tax for various input services which was transferred to its Chennai unit and also to other units; etc. Alleging contravention to Rule 2 (l) of Cenvat Credit Rules, 2004 (CCR for short), three Show Cause Notices were issued by the Revenue - (1) SCN No. 127/2010 dated 3.12.2010 for the period January 2009 to December 2009, (2) SCN No 145/2010 dated 28.01.2011 covering the period January 2010 to April 2010 and (3) SCN No. 445/2011 dated 07.10.2011 for the month of November 2010. The common factor in all the SCNs is the demand of allegedly ineligible credit, along with recovery of interest under Rule 14 ibid read with Section 11 AB of Central Excise Act, 1944 (CEA in short) and imposition of penalty under Rule 15 (1) ibid. The appellant offered detailed replies to the above SCNs and after considering the same, a common adjudication order, in Order-in-Original Nos. 2, 3 & 4/2017 dated 22.09.2017 came to be passed wherein, the adjudicating authority partly allowed and pa....
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....unning of the company, and any service tax paid is eligible for Cenvat credit. v. Authorized Service station maintains the vehicles of the company in proper shape for use in connection with the company's activities. vi. Rail Travel Agents Service are used for booking tickets for transporting their staff to the various factories, and marketing locations in connection with the marketing and manufacturing activities. vii. Outdoor catering Service is used for providing food required during meetings and conferences conducted at the office, to enable the meeting to be carried without any disruption. viii. Insurance Auxiliary Service is used to enable the company to settle the claims arising against the company and to conduct Insurance Surveys to ascertain the best insurance to be availed by the company. ix. House keeping service is used to keep the garden and premises clean and hygienic as mandated in the Indian Factories Act. x. Cenvat credit denied on service tax paid on transportation of goods was erroneously denied when the service was only used upto the place of removal. Ld. Advocate further vehemently contended that though no....
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.... manufacturing exempted goods or exclusively providing exempted services shall not be distributed. An input service distributor is required (under section 69 of the Act, read with notification no.26/2005-ST) to take a separate registration.". 5.4 Rule 7 of CCR prescribes the manner of distribution of credit by an ISD and the same reads as under:- "Rule 7. 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 conditions, 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 used in a unit exclusively engaged in manufacture of exempted goods or providing of exempted services shall not be distributed." 5.5 From the above Rule, it is very clear that two conditions are to be satisfied by an ISD and it is therefore, for the Revenue to give a finding as to the violation, if any, of any or both the conditions of R....
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....n or in relation to the manufacture of final products and clearance of final products from the place of removal, and includes services used in relation to setting up, modernization, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research storage upto the place of removal procurement of inputs, activities relating to business, such as accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, and security, inward transportation of inputs or capital goods and outward transportation upto the place of removal; 2(m) "input service distributor" means as office of the manufacturer or producer of final products 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 such manufacturer or producer or provider, as the case may be;" 7. Rule 3(1) has ....
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....lso referred to the Board's Circular (supra) and thereafter has concluded, to the following effect:- 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 conditions that - (a) the credit distributed against an eligible document shall not exceed the amount of service tax paid thereon, and (b) credit of service tax attributable to services used in a unit either exclusively manufacturing exempted goods or exclusively providing exempted services shall not be distributed. An input service distributor is required (under Section 69 of the Act, read with Notification No. 26/2005-S.T.) to take a separate....