2021 (5) TMI 366

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....order dated 12.07.2016 passed by the Customs, Excise and Service Tax Appellate Tribunal (hereinafter referred to as 'the tribunal' for short). The appeal was admitted by a this Court on the following substantial questions of law:   (i) Whether the credit distributed by ILTD which was void ab initio could be availed as credit by M/s. ITC, Bangalore. (ii) Whether CESTAT was right in not taking into cognizance the facts brought out in the Order-In-Original that M/s ILTD is not an office or establishment of the said manufacturer i.e., M/s ITC Ltd Bangalore and hence credit distributed by M/s ILTD as well as availed by M/s ITC were irregular? (iii) Whether the provisions of Rule 2(m) of Cenvat Credit Rules....

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....r the provisions of Rule 14 of Cenvat Credit Rules, 2004 read with Section 11 A of the Central Excise Act and why interest and penalty be not recovered. The assessee filed a reply. The Commissioner of Central Excise, Bangalore - II vide order dated 31.10.2011 has confirmed the demand of Rs. 3,25,80,308/-. 4. The assessee thereupon filed an appeal before the Customs Excise and Service Tax Appellate Tribunal. The tribunal by an order dated 12.07.2016 allowed the appeal preferred by the assessee. In the aforesaid factual background, this appeal has been filed. 5. Learned counsel for the appellant submitted that the tribunal ought to have appreciated that M/s ILTD is not eligible to be an Input Service Distributor as it is not an office or a....

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....the assessee. The aforesaid Division is not a separate legal entity and controls the supply chain of un-manufactured tobacco to the factories. The Company is registered as Input Service Distributor under the Cenvat Credit Rules, 2004 read with Service Tax Rules, 1994 for its Indian Leaf Tobacco Division in Guntur. The aforesaid registration enables distribution of service tax paid input credits to manufacturing activities carried on in the factories. A division bench of this court in COMMISSIONER OF C.EX., BANGALORE-I VS. ECOF INDUSTRIES PVT. LTD.,', 2011 (271) E.L.T. 58 (KAR.) has held that there are only two limitations imposed under Rule 7 of the Rules, for distribution of credit by a Input Service Distributor. Firstly, it cannot exc....