2023 (3) TMI 230

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....ong with applicable interest and imposing a penalty equal to the demand of duty under Rule 15 (2) of the said Rules ibid. The Commissioner has adjudicated the following three show cause notices together in the above said order as it involved a common issue. 1 SCN No. 66/2011 dated 29.08.2011 Sept 2010 to Mar 2011 Demand of Rs. 1,99,45,000/- 2 SCN No. 13/2012 dated 02.04.2012 Sept 2010 to Mar 2011 Demand of Rs. 62,02,088/- 3 SCN No. 35/2012 dated 17.10.2012 Sept 2010 to Mar 2011 Demand of Rs. 1,33,69,361/- 1.3 M/s. Pricol Limited had their head office/Corporate office at Avinashi Road, Coimbatore and it was registered as an Input Service Distributor (ISD) under the service tax law. They were availing credit in respect of various input services availed by them and were transferring the said credit to their manufacturing units including Plant-III, the appellant herein. 1.4. The appellant had been issued with the above three show cause notices to deny the credit availed by them based on the ISD invoices issued by their Head Office on the following grounds:- i) The ISD invoices did not contain the requisite details as required ....

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....all not be distributed." A perusal of the above Rule makes it clear that only condition is that the credit distributed against an input service invoice should not exceed the amount of service tax paid thereon and no credit relating to a wholly exempted unit shall not be distributed. There was no restriction on quantum of distribution, except for wholly exempted units and any amount can be distributed to any unit and there was no one to one correlation. There is no requirement cast under the above Rule that the input services should be received by the unit availing credit based on such ISD invoices. 2.3 Learned Advocate further contended that the Commissioner at the end of para 13.01 in his O-in-O, has observed that "on scrutiny of 21 volumes of ISD credit register it is noticed that with the particulars available in those registers, it is not possible to correlate a particular taxable service to a particular unit of the ISD without which the noticee can't claim eligibility of credit on the list of services." In this regard, he relied on a decision of the Hon'ble High Court of Karnataka in the case of Ecof Industries Pvt. Ltd., reported in 2012 (277) ELT 317, wherein it was he....

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....all such details as annexure to the invoice before the adjudicating authority. As the whole record of annexure is very bulky, same was not filed along with the returns filed by the respondents. But in future, the respondent has undertaken that along with invoice of input service distributor, they will file annexure showing the details of registration number of input service provider etc., as required under Rule 4 A (2) of STR, 1994. 4. In view of these observations, I do not find any infirmity in the impugned order. Same is upheld and the appeal filed by the Revenue is rejected but the respondents are directed that, in future, they will file all the details along with input service distributor's invoice as required under Rule 4A (2) of Service Tax Rules, 1994. The appellant is at liberty to verify whether the credit taken by the respondents is correct or not." In Final Order dated 16.03.2018, the Tribunal held as under:- "After hearing both sides duly represented by Shri M. Karthikeyan, learned Advocate for the appellants and Shri R. Subramaniyan, AC (AR) for the Revenue, we note that the appellants have been denied the Cenvat credit of service tax paid on vari....

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....egation against M/s. Pricol Ltd., ISD, is that they have wrongly availed the Credit on the strength of improper documents and thereafter, distributed it to its other units. For better appreciation, the definition of "Input Service Distributor" as defined under Rule 2(m) of CCR, 2004 is reproduced as under : "RULE 2. Definitions. - In these rules, unless the context otherwise requires, - ................. ............... . (m) "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 11 distributing the credit of service tax paid on the said services to such manufacturer or producer or provider, [or an outsourced manufacturing unit] as the case may be;" 7.1 The manner in which the Credit can be distributed among different units is prescribed under Rule 7 of CCR, 2004. During the relevant period, Rule 7 ibid stated that the Input Service Distributor may distribute the Credit to its manufa....