TaxTMI 
TaxTMI 
2023 (10) TMI 955
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.... registration as Input Service Distributor, the issue is no longer res integra as in the following judgments, it has been consistently held that prior to registration of ISD credit can be passed on to the manufacturing unit: CCE Vs. Hinduja Global Solutions Ltd- 2022 (4) TMI 71- Karnataka High Court CCE Vs. Dashion Ltd.- 2016 (2) TMI 183- Gujarat High Court Spice Degital Ltd Vs. CCE- 2023 (5) 196 CESTAT Chandigarh 3M Electro & Communication India Pvt Ltd Vs. CCE- 2023 (6) TMI 1104- CESTAT Chennai United Phosphorus Ltd Vs. CCE-2022 (11) TMI 747-CESTAT Ahmedabad Sanghi Industries Ltd Vs. CCE-2019 (12) TMI CESTAT Ahmedabad Philips Electronics (I) Ltd Vs. CCE- 2019 (6) TMI 361- CESTAT Ahmedabad Hindalco Industries Ltd Vs CCE-2016 (100 TMI 31- CESTAT Ahmedabad) 2.1 As regard the issue (B), he submits that prior to 2016, there was no restriction under CENVAT Credit Rules, 2004 in the distribution of credit of one unit to the other unit under the provision of Rule 7 of Cenvat Credit Rules, 2004. Therefore, on this count also the credit cannot be denied. In support, he placed reliance on the following judgments: ....
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....endent of Central Excise in terms of Rule 3 thereof. Sub-rule (2) of Rule 3 further required any provider of taxable service whose aggregate value of taxable service exceeds certain limit to make an application for registration within the time prescribed. However, there is nothing in the said Rules of 2005 or in the Rules of 2004 which would automatically and without any additional reasons dis-entitle an input service distributor from availing Cenvat credit unless and until such registration was applied and granted. It was in this background that the Tribunal viewed the requirement as curable. Particularly when it was found that full records were maintained and the irregularity, if at all, was procedural and when it was further found that the records were available for the Revenue to verify the correctness, the Tribunal, in our opinion, rightly did not disentitle the assessee from the entire Cenvat credit availed for payment of duty. Question No.1 therefore shall have to be answered in favour of the respondent and against the assessee." 4.2 The aforesaid decision of the Hon'ble High Court was followed by the Hon'ble Karnataka High Court in the case of CCE and ST Vs. Hinduja Glob....
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..... 945 (Raj.)]. 2.1 Department has accepted the judgments where the Hon'ble High Courts dismissed the Department's appeal inter alia holding that substantial benefit cannot be denied because of procedural irregularity. 2.2 In the case of Dashion Ltd., the assessee was engaged in manufacture of water treatment plant and other connected items and was availing benefit of CENVAT credit on the duty paid on inputs, capital goods and input services as permissible under CENVAT Credit Rules, 2004. The assessee had five manufacturing units and had its registered office at Vatva, Ahmedabad. The assessee was also providing several taxable services such as erection and commissioning, repairing and maintenance of water treatment plant, etc. 2.3 The revenue authorities, during scrutiny of the records of the assessee, noticed that it was availing the credit of service tax paid for various services by one unit for the purpose of clearance of other unit. After gathering details from the assessee, the adjudicating authority issued show cause notice calling upon the assessee as to why the CENVAT credit of service tax on input service should not be recovered with inter....
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....efore, merely because the ISD registration was not obtained the CENVAT Credit cannot be denied. As regard the second issue that the head office of the appellant distributed 100% credit to a single unit i.e appellant, we find that in Rule 7(d) of CENVAT Credit Rules, 2004, existing during the relevant period there was no restrictions for distribution of CENVAT Credit to one particular unit of an assessee despite having more than one unit. Accordingly, on this ground also credit cannot be denied. In this regard, we reproduce Rules existing prior to 2012 and post 2012 as under: Rule 7 as Existing Prior to 2012 :- "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 condition, 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 used in a unit exclusively engaged in manufacture of exempted goods or....