TaxTMI 
TaxTMI 
2022 (3) TMI 933
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.... Excise & Service Tax (Appeals), LTU, Mumbai, upholding the order of the Deputy Commissioner of Central Excise & Service Tax, LTU, Mumbai, rejecting the refund claim. 2.2 The appellant herein is one of the two units of the main company of Wyeth group. Wyeth Ltd. having registered office in Mumbai took registration as input service credit distributer and has distributed certain credits to the appellant unit amounting to Rs. 18,89,971/-. The input credit so distributed was in respect of advertisement services. 2.3 During the course of audit, it was observed that the credit distributed to the appellant pertained to the services which were not in respect of the goods manufactured by them and the appellant was therefore asked to reverse the credit. 2.4 The appellant, as suggested, reversed the entire credit by way of making debit of this amount in their account. However, such debit was made under protest and there is no dispute in respect of the debit so made under protest. 2.5 Subsequently in 2010 the appellant filed a refund claim for seeking refund of the amount so debited by them under protest, quoting the judgment of Bangalore bench of the Tribunal in the case of ECOF I....
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....€¢ Neptune Wires P. Ltd. [1988 (36) ELT 388 (Bom.)] • Further the refund claim needs to have been examined for unjust enrichment. • These grounds though not part of the authorities below are questions of law and could be taken up by him at this stage. • Therefore the appeal needs to be dismissed. 4.1 We have considered the impugned order along with the submissions made in appeal and during the course of argument. 4.2 Rule 7 of the Cenvat Credit Rules, 2004 at the material time read as follows:- "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: (b) credit of service tax attributable to service used in a unit exclusively engaged manufacture of exempted goods or providing of exempted services shall not be distributed; (c) credit of service ....
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...."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 registration." 8. The combined reading of the Rule 7 and the clarificatory Circular dated 23-8-2007 clearly shows that there are only two restrictions regarding the distribution of the credit. The first restriction is that the credit should not exceed the amou....
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....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 use in a unit exclusively engaged in manufacture of exempted goods or providing of exempted services shall not be distributed." Therefore, only two limitations are put for the distribution of credit by an input service distributor. Firstly, it cannot exceed the amount of service tax paid and secondly, the credit of service tax attributable to service used shall not be distributed 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 inpu....
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.... and manner as may be prescribed and the application shall be accompanied by such documentary or other evidence (including the documents referred to in section 12A) as the applicant may furnish to establish that the amount of duty of excise and interest, if any, paid on such duty in relation to which such refund is claimed was collected from, or paid by, him and the incidence of such duty and interest, if any, paid on such duty had not been passed on by him to any other person : Provided that where an application for refund has been made before the commencement of the Central Excises and Customs Laws (Amendment) Act, 1991, such application shall be deemed to have been made under this sub-section as amended by the said Act and the same shall be dealt with in accordance with the provisions of sub-section (2) substituted by that Act : Provided further that the limitation of one year shall not apply where any duty and interest, if any, paid on such duty has been paid under protest." 4.8 In view of the specific provisions in Section 11B, the refund claim by the appellant could not have been denied on these grounds. 4.9 Further we observed that when the Revenue se....