TaxTMI 
TaxTMI 
2024 (6) TMI 1115
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the State of Jharkhand (hereinafter referred to as the "Said factory") and its Registered and Head Office at Mumbai. TSL has the following divisions located in various parts of the country: - (a) Steel (b) CRC West located at Tarapore, Maharashtra (c) Tubes Division at Jamshedpur, Jharkhand (d) Bearings Division at Kharagpur in West Bengal (e) Ferro Alloys & Manganese Division (FAMD) having its Head Office at Kolkata in West Bengal (f) Wire Division at Tarapore, Maharashtra (g) CRM Sisodara in Gujarat (now closed) Each of the aforesaid division of TSL is a profit centre and consists of manufacturing units and/or mines located in different parts of the country. The Steel Division consists of the following units:- (a) Steelworks at Jamshedpur (b) Agrico Unit at Jamshedpur (c) Collieries at Jharia (d) Mines at Noamundi (e) Collierial at West Bokaro. Each manufacturing unit of the various Divisions, though separately registered in terms of Rule 9 of the Central Excise Rules, 2002 read with provisions of Notification No. 35/2001-CE(NT) dated June 26, 2001, do no....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... dutiable final products manufactured and cleared from the said Steelworks. 4. For the intellectual property service rendered by Tata Sons Limited during a particular year the invoice was issued by Tata Sons Limited during the immediate succeeding year of the financial year in which the service was rendered. Such invoice issued by Tata Sons Limited contained details of the amount of subscription, the period for which the subscription was charged, service tax, etc., paid and all other relevant details. During the said period, on the basis of ISD invoices issued by Mumbai Head Office of TSL distributing the service tax paid on intellectual property service rendered by Tata Sons Limited, TSL availed CENVAT credit of Rs. 25,18,82,031/-. On audit of the Books of accounts and records of TSL carried out by the jurisdictional Central Excise & Service Tax authorities during the period September, 2010 to October, 2010 it was alleged that TSL had incorrectly availed CENVAT credit of the subject service tax involved on the basis of ISD invoices, inasmuch as, the Mumbai Head Office should have distributed the credit proportionately to all the divisions of TSL and not to the Jamshedpur ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ourt and the coordinate Bench of the Tribunal and finding the same 'fully applicable" to the facts of the instant case held that the respondent, Tata Steel Limited, was entitled to distribute the credit of service tax paid in respect of service rendered under (a) Brand Equity and Business Promotion Agreement (in short, "BEBP') entered into by and between the TSL and its holding company, Tata Sons Limited, exclusively to its Jamshedpur Steelworks during the relevant period being April, 2006 to March, 2011. The Tribunal further held that the service rendered by Tata Sons under the BEBP agreement dated December 08, 2018 was eligible as "input services" for TSL as the service tax paid is available as CENVAT credit to TSL under the CENVAT Credit Rules, 2004. In coming to this decision the Tribunal applied the decision of its coordinate Bench on a similar issue in the case of Jubiliant Life Science Limited Vs. Commissioner of Customs, Central Excise & Service Tax, 2017 (3) GSTL 298(T); the appeal against which decision filed by the Department was dismissed by the Hon'b1e Supreme Court of India, with the finding that there was no merit in the appeal [Commissioner of Customs, Central Ex....
X X X X Extracts X X X X
X X X X Extracts X X X X
....edure of taxation. Relying upon the aforesaid submissions he prays that the order passed by the commissioner be restored. 8. Mr. S. Chakraborty, learned senior counsel for the respondent submits that question of law (i) has been decided by the Tribunal on the basis of the relevant legal provisions which have received approval of, inter-alia, both the Hon'b1e Karnataka High Court and the Hon'b1e Gujarat High Court on the issue and that of the Tribunal, affirmed by the Apex Court. Further, other question has been decided by the Tribunal following the decisions of its coordinate Bench. All these decisions, including the decision of the coordinate Bench of the Tribunal, have attained finality, either being affirmed by the Supreme Court or there being no appeal against the same preferred before the Hon'ble Supreme Court of India/ before the High Court against the order of the Tribunal. He strenuously contended that in the premises, as per principles settled by the Hon'ble Apex Court and followed by Hon'ble High Courts, Department having accepted the decisions, no interference with Tribunal's decision is called for: In this regard he referred following decisions: ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....roviding of exempted service. It appears from record that except in respect of the service tax amounting to Rs.83,86,784/- which was attributable to West Bokaro and Jamadoba Collieries of TSL engaged in manufacture of exempted goods, which it, on its own, discovered as inadvertently wrongly taken CENVAT credit and duly reversed the same even before issuance of the show cause notice, along with appropriate interest thereon, the requirements contained in Rule 7 of the CENVAT Credit Rules were duly satisfied. Hence, it appears that the credit was rightly distributed by the Head Office of TSL to the Jamshedpur Steelworks. 10. No provision of the CENVAT Credit Rules, including Rule 7, prohibits input service tax paid at a particular unit being sought to be availed in another unit. Once the manufacturer is registered as an input service distributor in terms of Rule 7, it is entitled to distribute the credit of duty paid on such inputs in the manner prescribed to any of its unit keeping into account the limitations imposed by Rule 7. The extraneous reasonings of the adjudicating authority contained in the said order are irrelevant and have no substance or merit whatsoever, partic....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r providing of exempted services. 10. Therefore, these are the only two limitations, which are imposed in Rule 7 preventing the manufacturer from utilizing the CENVAT credit, otherwise, he is entitled to the said credit. Merely because the input service tax is paid at a particular unit and the benefit is sought to be availed at another unit, the same is not prohibited under law. It is in this context, the manufacturer is expected to register himself as a input service distributor and thereafter, he is entitled to distribution of credit of such input in the manner prescribed under law. Therefore, the order passed by the tribunal is legal and valid and does not suffer from any legal infirmity and does not call for any interference and therefore it is dismissed." The same view is reiterated in the case of Commissioner of C.Ex Vs. ECOF Industries Pvt. Ltd., 2012 (277) ELT 317 (Kar) & United Phosphorus Ltd. Vs. Commissioner of C.Ex, 2013 (30) STR 509 (T). 11. In the instant case, the company Tata Steel Limited, which is duly incorporated and registered under the Companies Act, 1956 as a public limited company has various divisions/units situated in various parts of the co....
X X X X Extracts X X X X
X X X X Extracts X X X X
....in 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 avalling 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 inegularity, if at all, was procedural and when it was further found that the records were available for the Revenus to verify the correctness, the Tribunal, in our opinion, rightly did not dis-entitle the assessee from the entire Canvat credit availed for payment of duty. Question No.1 therefore shall have to be answered in favour of the respondent and against the assessee. 8. Coming to the question of penalty, right from the show cause notice stage till the final disposal of the show cause notice proceedings, we find little evidence to support the allegations of willful misstatement, suppression, fraud or collusion on the part of the assessee. In fact, perusal of the show cause notice ....