2024 (6) TMI 761

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....ing units located at Mumbai and Chennai. On this ground, the Cenvat credit taken was sought to be denied and the demand of Rs.38,06,03,169/- was issued under various Show Cause Notices. The first Show Cause Notice was issued on 23.09.2009 for the period June 2005 to December 2008, for Rs.11,10,03,057/- by invoking the extended period provisions. The adjudicating authority dropped the major portion of the demand and confirmed the demand of Rs.13,55,26,043/- on the ground that the Cenvat to this extent was taken on various ineligible input services. Being aggrieved, the Appellant is before the Tribunal. 2. The Ld.Advocate for the Appellant submits that the only allegation contained in the show cause notice was on the ground that the input services were utilized by other manufacturing units of the Appellant and the same were not used within the factory premises or in relation to the manufacturing process of the appellant's unit. He submits that there was no allegation to the effect that certain input services were not eligible for Cenvat credit. He further submits that the demand has been confirmed only by listing various input services as ineligible services. Since this was not the ....

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....lity to take credit should have been questioned only at the end of the ISD unit and cannot be questioned at the end of the Cenvat availing unit in Kolkata. Accordingly, in that case, the recovery proceedings initiated against the Kolkata unit was set aside by the Tribunal. 7. He further relies on the case law of Gulf Oil Corporation Ltd. vs. Commissioner of C.Ex. & Service Tax, VAPI [2016 (43) S.T.R. 220 (Tri.- Ahmd)] and Rallis India Ltd. vs. Commissioner of Central Excise & Service Tax [(2023) 11 Centax 339 (Tri.-Ahmd)]. He submits that in all these cases it has been held that the Cenvat taken at the recipient's end cannot be questioned towards eligibility of Cenvat credit passed on by the ISD unit. 8. In view of the above submissions, he prays that the Appeal may be allowed on merits. 9. The Ld.AR for the Department reiterates the findings of the lower authority and submits that where it was found that the Appellant was eligible for Cenvat credit, the same has been allowed and a major portion of the demand has been dropped. The Adjudicating authority has gone into the details of various services involved and only after thorough verification he has confirmed the demand by lis....

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.... 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 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 providing of exempted services shall not be distributed." W.e.f. 01.04.2012, the Rule 7 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 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 providing ....

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....(supra) has held as under:- "4. I have considered the rival submissions. I find that the issue is limited to the refund of the service tax contained in the ISD invoices received by the appellant. The ISD invoices have been issued by ISD distributor located elsewhere and Learned C.A. pointed out that independent returns are filed for the ISD. The record of ISD has also been audited by Revenue and no objection regarding this distribution has been raised. 5. I am in agreement with the Learned C.A. that regarding distribution or admissibility of these service by the ISD unit a challenge can only be made by the authorities supervising SEZ unit. At the end of SEZ unit, the question of receipt or admissibility of these services cannot be raised. Consequently, I find no merit in the order in appeal. The same is set aside and appeal is allowed." 16. This Bench in the case of M/s. Nalco Water India Limited (supra) was dealing an identical issue. In this case, the Bench has relied upon in the case of Balkrishna Industries Limited, wherein it is held as under:- "7. As the services has been availed at the head office and same is a part of the appellant itself as a manufacturer. Therefo....