TaxTMI 
TaxTMI 
2022 (10) TMI 875
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....ce by M/s Parle Biscuits Pvt. Limited to its contract manufacturing unit (M/s M.B. Industries Pvt. Ltd.,) is legal and correct when the contract manufacturing is carried in terms of Notification No. 36/2001-CE (NT). 2. The details of appeals are as follows:- Sl. No. Appellants Appeal No. Duty (Rs.) Penalty (Rs.) 1 M/s M. B. Industries Pvt. Ltd., E/51572/2019 1,12,81,585/- 1,12,81,585/- 2 M/s Parle Biscuits Pvt. Ltd., E/51573/2019 - 12,00,000/- 3 M. V. Joshi E/51574/2019 - 12,00,000/- 4 Mariamma Iyer E/51575/2019 - 12,00,000/- 5 M/s M. B. Foods Pvt. Ltd., E/51576/2019 1,52,17,339/- 1,12,81,585/- 6 Mariamma Iyer E/51577/2019 - 15,00,000/- 7 M/s Parle Biscuits Pvt. Ltd.,....
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....store-room or warehouse or otherwise uses excisable goods. iii. Rule 9(2) provides that the Board, may by notification, and subject to such conditions or limitations as may be specified in the notification, specify person or class of persons who may not require such registration. iv. Notification No.36/2001-CE (NT) dated 26.6.2001 has been issued under Rule 9(2) of the 2001 Rules and provides exemption from registration to the Contract Manufacturing Unit subject to conditions and stipulations. v. Rule 2(m) read with Rule 7 of CCR, 2004, provides a facility to an office of manufacturer of final product to distribute cenvat credit in respect of service tax paid on the input service to its manufacturing unit, wherein manufacturing unit n....
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....-CE(NT), the Appellants complied with all the procedural formalities; such as maintenance of records of the goods manufactured, credit taken and utilized under Cenvat Credit Rules, payment of excise duty on finished goods, filing of Returns and furnishing of necessary information to the Department, as and when called for, etc. on behalf of the Principal Manufacturer (PBPL) and the Appellants were complying with the same in toto. x. Since the Biscuits, Confectioneries, etc. are manufactured not only in the factories of PBPL, but also in the factories of CMUs, as a business strategy, the advertisement, market research, sales promotion & marketing, etc. were centralized and was/is being handled by their Corporate Office at Bahadurgarh being ....
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....ly manufactured and cleared to PBPL. The Appellants understand that PBPL-ISD had distributed such proportional credit to other CMUs also, alike the Appellants. The credit taken and utilized was reflected in the Cenvat Account and periodical Returns (ER-1 & ST-3) filed from time to time. xiii. Thus, the inputs required for manufacture of the Biscuits on contract manufacturing basis are procured by PBPL, which were supplied by the manufacturer-suppliers directly to the Appellants' factory on payment of excise duty. The invoices of the suppliers were showing the Appellants as the "consignee" and PBPL as the "buyer" and the Appellants were taking credit of duty paid on the inputs and were utilizing the same for payment of duty on the Biscuits....
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....ing units, including a job workers. xvii. Without prejudice, Rule 7 of CCR was substituted w.e.f. 1.4.2016, wherein a specific provision was made for an ISD to distribute the credit of input services even to outsource manufacturers/job-workers/contract manufacturers, manufacturing goods on their behalf and paying duty on their sales price/MRP. This amendment by "substitution" of Rule 7 of CCR was made only to correct the possible mistake/lacuna in the earlier Rule and, hence, the same would have retrospective effect from the inception of CCR, 2004. xviii. In any case, the issue whether input service credit distributed by M/s.Parle Biscuits Pvt. Ltd., the Principal Manufacturer as an Input Service Distributor (ISD) to Contract Manufactur....
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....na still is entitled for cenvat credit when the input service is attributed to the goods on which excise duty is paid includes the cost of services on which credit was taken." 7. The Larger Bench have answered the questions as follows:- "41 As noticed above, CENVAT is a beneficial scheme with the stated purpose of allowing CENVAT credit of all taxes paid on inputs and services so as to avoid cascading effect of taxes and duties. 42 Thus, even in terms of the provisions of Rule 2(m) and Rule 7 of the CENVAT Rules, as they stood prior to 01.04.2016, the appellant company can distribute CENVAT credit in respect of the service tax paid on inputs services to its manufacturing units, including a job worker. 43 Such being the position, we a....