TaxTMI 
TaxTMI 
2023 (2) TMI 660
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....adjudication are as follows: That the appellants (M/s. IAIL) were engaged in manufacture of Aluminium Alloy Extruded Products at their Bhiwadi Unit. They were also having one APP Division with centralized registration in the category of 'Commercial & Industrial Construction Services' at Delhi. The later was also having Input Service Credit Distributor Registration (ISD Registration). During the course of audit of appellant's record, department observed that appellant was taking Cenvat credit on the strength of invoices as were raised by the ISD. The activity of ISD was observed to be nothing more than fixing of door and windows which were manufactured by the Bhiwadi unit/the appellant. Thus, the doors and windows were manufactured by the appellant at their Bhiwadi factory and were cleared to their APP Division at Delhi. From the scrutiny of invoices issued from the Head Office/ISD, department observed that Head Office/ISD has raised invoices for credit of whole of service tax paid by them in respect of various services including the services used for providing output services and other activities. It appeared to the department that the Head Office of the appellant had distribute....
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....ly, both the aforesaid amounts were proposed to be disallowed. 1.3 The proposal was initially confirmed vide Order-in-Original No. 43 & 44/2012-CE dated 19.07.2012 when the order was appealed before this Tribunal, vide Final Order No. 52603-52604/2017 dated 27.03.2017, the matter was remanded back to the original adjudicating authority for denovo adjudication after providing a reasonable opportunity to the appellants to present their case with liberty to file the additional documents. Pursuant to said remand that the order under challenge has been passed still confirming the disallowance of the Cenvat credit availed/utilized by the appellants. Still being aggrieved, the appellant is again before this Tribunal. 2. We have heard Shri B.L. Yadav, learned Advocate for the appellant and Shri O.P. Bisht, learned Authorized Representative for the department. 3. Learned Counsel for the appellant has mentioned that all the services alleged in the show cause notice had already been held to be the eligible input services under catena of decisions. Hence, it has wrongly been alleged and held that the appellant as well as its APP Division were not entitled for the Cenvat credit in resp....
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.... (vi) Pepsico India Holdings (Pvt.) Ltd. Vs. Commr. Of Central Tax, GST Commissionerate, Tirupati reported in 2022 (56) GSTL 22 (Tri.-Hyd.) (vii) Ramco Cements Ltd. Vs. Commissioner of Central Excise, Puducherry reported in 2017 (5) GSTL 105 (Tri.- Chennai) (viii) Dalmia Cements (Bharat) Ltd. Vs. Commr. of C. Ex. & S.T. (LTU), New Delhi reported in 2017 (3) GSTL 81 (Tri.- Del.) (ix) Unitech Machines Ltd. Vs. Commissioner of Central Excise, Meerut-I reported in 2018 (9) GSTL 401 (Tri.-All.) (x) RMZ Infotech Pvt. Ltd. Vs. Commr. Of Central Tax, Bengaluru East reported in 2022 (64) GSTL 599 (Tri.-Bang.) (xi) Commissioner of Customs, Delhi-III Vs. Mark Exhaust Systems Ltd. reported in 2015 (39) STR 351 (Tri.- Del.) (xii) Carrier Airconditioning & Refrigeration Ltd. Vs. C.C.E., Delhi-IV reported in 2016 (41) STR 824 (Tri.-Chan.) (xiii) Commissioner of C.Ex., Cus. & S.T., Vadodara Vs. Transpek Industry Ltd. reported in 2018 (12) GSTL 29 (Guj.) 4. While rebutting, learned DR submitted that the whole input service credit is found to have been passed to the appellant in violation of Rule 7 of Cenvat Credit Rules, 2004. It is ....
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....ue invoices for distribution of Cenvat credit by adopting the turnover ratio instead of actual basis of availment of service. Despite these admissions still violation of Rule 2(m), Rule 3 and Rule 7 of Cenvat Credit Rules, 2004 has been alleged and the services herein are denied to be the input services in terms of Rule 2(l) of said Cenval Credit Rules, 2004. It is therefore foremost necessary to look into these rules: Rule 2(m)-Cenvat Credit Rules, 2004 defines ISD as: "input service distributor" means an 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. Rule 7-Cenvat Credit Rules, 2004 - prescribes Manner of distribution of credit by input service distributor as: The input service distributor may distribute the CENVAT credit in respect of the service tax paid on the input service to its ....
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....edundant. This in any case would not be the intention of the legislature. 9. Further, in terms of Rule 2(l) "input Service" means - any service, (i) used by a provider of taxable service for providing an output service; or (ii) used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products upto the place of removal, (iii) 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. 10. As per this definition, those services which are used in or in relation to manufacture of finished goods qualify as input service (including those mention....
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....acture of exempted goods or in providing the exempted services. Thus, we hold that there appears no restriction in said Rule 7 of Cenvat Credit Rules, 2004 for distributing even the whole credit by ISD to any one of the units. However, in the present case the entire credit has been distributed based on the turnover ratio formula. We observe that post order of remand by this Tribunal, the appellant provided additional documents in the form of balance sheets and invoices. The balance sheets contain the details of total turnover of the company, turnover from service providing unit and hence, the ratio of turnovers intimated were quite verifiable but the order under challenge is absolutely silent about verifying those details from the documents provided. 13. We further hold that the adjudicating authority despite admitting that the service providing unit only fixes the anodized aluminium doors and windows with extruded build up aluminium section which are being manufactured by the appellant's Bhiwadi unit, has still failed to appreciate that the services in question could not be exclusively used by the service providing unit only. No specific document has been discussed by the adjud....