TaxTMI 
TaxTMI 
2022 (5) TMI 1199
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....y the Ld. Adjudicating authority along with imposition of penalty. There are three issues to be decided in the present appeal, Firstly, whether the distribution of Cenvat credit on account of ISD of Rs. 93,62,730/- is legal and proper or not as per provisions of Rule 7 of the CCR, 2004, secondly as to the excess availment of Cenvat credit of more than 20% of credit vis-à-vis the service tax payable to the extent of Rs. 1,56,70,418/- by the appellant under Rule 6(3)(c) of the CCR, 2004 as existed at that point of time and lastly whether the Appellant is liable to pay interest and penalty on the amount of Cenvat credit availed by it on Capital Goods to the full extent in the first year of purchase instead of 50%. 2. We have heard th....
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....nit he should also get registered himself as a service provider and then, he would be able to collect all the input service tax paid in all its units and accumulate them at its head office and distribute the said credit to its various units. At the time of distribution, the manner of distribution is provided in Rule 7 which 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 th....
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....clusively 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." 10. Therefore, these are the only two limitations, which are imposed in Rule 7 preventing the manufacturer from utilizing the CENVAT credit, otherwise, he is entitled to the said credit. Merely because the input service tax is paid at a particular unit and the benefit is sought to be availed at another unit, the same is not prohibited under law. It is in this context, the manufacturer is expected to register himself as a input service distributor and thereafter, he is entitled to distribution of credit of such input in the ma....
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.... 5. As regards the last issue of payment of interest on the excess Cenvat credit availed by the Appellant on capital goods in the first year of purchase and also penalty being in violation of Rule 4(2)(a) of the CCR, 2004, we find that the matter is squarely covered by the judgment of the Hon'ble Karantaka High Court in the case of COMMISSIONER OF C. EX. & S.T., BANGALORE Versus BILL FORGE PVT. LTD. [2012 (26) S.T.R. 204 (Kar.)] wherein it was held by the Court that - "21. Interest is compensatory in character, and is imposed on an assessee, who has withheld payment of any tax, as and when it is due and payable. The levy of interest is on the actual amount which is withheld and the extent of delay in paying tax on the due date. If....