TaxTMI 
TaxTMI 
2026 (1) TMI 1439
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....he fact, in brief, respondent M/s Gloster Cables Ltd., were manufacturing various industrial cables and clearing on payment of excise duty. The appellant also availing Cenvat Credit on inputs and input services. They had two units namely, Unit-I and Unit-II. They were also having sales depots located across the country through which they sell their finished goods. The respondent took Cenvat Credit of Service Tax paid on services that were received by sales depots, head office and Unit-II at Kallakal village. The respondent took Cenvat Credit on services received at various places without registering as input service distributer under Rule 7 of Cenvat Credit Rules, 2004. The Show Cause Notice was issued vide OR No. 76/2014-HYD-I Adjn dated 0....
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.... on the turnover of the manufacturing units and that no credit can be passed on to the extent of services attributable to the exempted goods and services. Learned Commissioner ignored the restrictions and placed the respondent under Rule 7(b) of the Cenvat Credit Rules, 2004. The excise duty was exempted under Notification 214/1986 thereby goods manufactured in the Unit-II or job work unit were exempted making it ineligible for the Cenvat Credit on services. 6. Learned AR submits that Learned Commissioner observed in his order that Unit-II did not exist until November, 2011, but Unit-II existed, through not as registered unit under Central excise and engaged in job work that was under exemption Notification 214/86-CE. Merely because, the....
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....015. Therefore, cross-objection has been filed after 45 days. It is also important that the impuged order or any part of impugned order is not against of the respondent. In view of these facts, cross-objection is not permissible in law, yet it will be treated as reply of memorandum of appeal. 11. Learned Counsel for the respondent submits that the provisions of Rule 7 of Cenvat Credit Rules, 2004 prior to 01.04.2012, stipulated that distribution of credit is required if the manufacturer is having more than one manufacturing unit and in that case only the manufacturer is required to register as input service distributor to distribute credit and not otherwise. The respondent followed job work procedure as per Notification No.214/1986-CE da....
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....urts, High Courts and CESTAT holding that substantial benefit cannot be denied because of procedural irregularity. 15. Learned Counsel for the respondent submits that definition of 'input service' has not barred the services used the outside the assessee's premises. 16. Learned Counsel for the respondent submitted regarding suppression of facts that on the same issue ineligibility of input service tax credit availed in Unit-II, Show Cause Notices O.R No. 76/2014-Hyd-1 Adjn dated 03.09.2014 and O.R No. 92/2013-Hyd - 1 Adjn dated 06.11.2013. The appellant in the grounds of appeal para E stated that in the said notices, the usage of credit pertaining to manpower and security service used in Unit-II was under examination and legal issue i....
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....ned that 729 invoices were in the name of head office, Registered office and depots and 9 other invoices on the Unit-II when Learned Commissioner observed that 9 invoices which was on address of Unit-II, demand was barred by limitation and in which credit has been taken, the services are used directly or indirectly for manufacturing of their dutiable goods, Unit-II was related to Job work for Unit-I. Input services are used by manufacturer in relation to manufacture of final product i.e., cables. The services utilized in unit-II is paid by the manufacturer i.e., registered office. Unit-II has no independence existence and it is an extension of unit-I and some part of job work activity takes place as observed by Learned Commissioner. Therefo....
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....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." 20. There is no any allegation that input services are not used in or in relation to the manufacture of final goods. 21. Even, CBEC issued Circular No. 1063/2/2018-CX dated 16.02.2018 accepted the order of Supreme Court, High Courts and CESTAT holding that substantial benefit cannot be denied because of procedural irregularity and non registration of ISD is only a procedural irregularity for which substantial benefit of Cenvat Credit cannot be denied when all the necessary records have been maintained by the respondent. 22. Department su....