TaxTMI 
TaxTMI 
2026 (2) TMI 180
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....l Chandigarh, Haryana, it was noticed that the Appellants have availed CENVAT Credit on input services on account of 'advertisement agency services' as distributed by their head-office; however, the Appellants have not booked any expenditure in the books of account of the branch, but have booked in the books of account of the head-office; accordingly, the SCNs dated 21.08.2009, 31.12.2012 & 08.11.2013 covering the period April 2006 to March 2009, December 2011 to August 2012 and October 2012 to September 2013 respectively were issued to the Appellants alleging that the Appellants have violated the Rule 7 of the CENVAT Credit Rules, 2004 and other rules and have wrongly availed CENVAT Credit of Rs.3,07,83,328/-. The proposals in the SCNs were confirmed by the impugned Order-in-Original dated 30.06.2014 vide which demand of allegedly wrongfully availed CENVAT Credit was confirmed along with interest and equal penalty. Hence, the present appeals. 3. Mr. Mehul Jivani, the learned Consultant for the Appellant submits that there is no condition either under Rule 7 or Rule 2(m) or Rule 2(l) that the expenses should be booked in the books of account of the factory. He submits that the C....
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....USTAN COCA-COLA BEVERAGES PVT LTD - 2025 (2) TMI 949-CESTAT MUMBAI • CCE, DURGAPUR VS. M/S DURGAPUR STEEL PLANT - 2025 (3) TMI 428 CESTAT KOLKATA • M/S G.P. PETROLEUM LTD. - 2019 (3) TMI 33 CESTAT MUMBAI • ERICSSON INDIA PVT LTD - 2019 (1) TMI 722 CESTAT HYDERABAD • HENKEL ANAND INDIA PVT LTD - 2020 (1) TMI 369 CESTAT CHANDIGARH • JK TYPE & INDUSTRIES LIMITED - 2020 (1) TMI 583 CESTAT NEW DELHI • SHRIRAM RAYONS LIMITED - 2020 (1) TMI 758 CESTAT NEW DELHI • METRO SHOES PVT LTD VS. COMMISSIONER OF CENTRAL EXCISE, MUMBAI-I - 2019 (9) TMI 1532 CESTAT MUMBAI • M/S GODFREY PHILIPS INDIA PVT. LTD. - 2009 TIOL 269  M/S ERICSON (INDIA) PVT. LTD. - 2011 24 STR 346 3.2 The learned Consultant submits in addition that the issue is entirely revenue neutral as credit denied to Bawal unit will be available as credit to other units. In this regard, he relies on the following decisions: • GREAVES COTTON LTD - 2015 (37) STR 395 (TRI. CHENNAI) • RAYMOND LTD - 2017 (47) STR 142 (TRI. DEL.) • OERLIKON BALZERS COATING INDIA P LTD - 2018 (12) TMI 1300 BO....
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.... has held in para 7, 8 & 9, as under: "7. We note that proviso to Rule 3(4) limiting such credit availment does not apply where the credit is availed based on the invoices issued by ISD. In this regard, we may refer to the decision of the Tribunal in the case of Godrej Consumer Products Ltd (cited supra), wherein the proviso to Rule 3(4) has been examined and the Tribunal has observed as under: "6. For better appreciation, proviso to Rule 3(4) is reproduced as under :- "Provided further that the CENVAT credit of the duty, or service tax, paid on the inputs, or input services, used in the manufacture of final products cleared after availing of the exemption under the following notifications of Government of India in the Ministry of Finance (Department of Revenue):- (i) No. 32/99-Central Excise, dated the 8th July, 1999 [GSR 508(E), dated 8th July 1999]; (ii) No. 33/99-Central Excise, dated the 8th July, 1999 [GSR 509(E), dated 8th July 1999]; (iii) No. 39/2001-Central Excise, dated the 31st July, 2001 [GSR 565(E), dated the 31st July, 2001]; (iv) No.56/2002-Central Excise, dated the 14th November, 2002 [GSR 764(E), dated....
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.... 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 use in a unit exclusively engaged in manufacture of exempted goods or providing of exempted services shall not be distributed." 6.1 Only with effect from 1-4-2012, Rule 7 has been amended to include that the distribution of credit shall be on pro rata basis. The decision in the case of ECOF Industries P. Ltd. (supra) also has laid down that there are no restriction under the said Rules limiting the distribution of service tax credit. In the present case, the appellant has availed the credit on ISD invoices distributed by their Head Office. To such availment or utilization of credit by appellant, the proviso to Rule 3(4) does not apply at all. We therefore are of the view that the demand raised alleging that the appellant has violated provisions of Rule 2(1) r/w proviso to Rule 3(4) cannot sustain and requires to be set aside, which we hereby do. 6.2 The demand of Rs. 1,86,113/- has been raised alleging that the appellant has availed credit....
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....edit. And it is only such availment by the distributor that can be put to notice for ineligibility as espoused in the decisions that fulfill the criteria of precedent." 9. As regards the allegation of the appellant-Revenue that the respondent has not followed the provisions of Rule 7, which provides the manner of distribution by ISD, we find that first of all, the show cause notices do not allege the violation of any one of the provisions of Rule 7; and secondly, during the relevant period, Rule 7 does not provide for the mechanism of distributing the credit proportionately. The said condition was made effective only from 01.04.2012, therefore, the allegation of department that the respondent has violated the provisions Rule 7 does not hold good. This has been held consistently by the Tribunal and the High Courts in the various decisions as cited supra." 8. Further, we also find that in the case of Appellants themselves reported in 2024 (3) TMI 1038, this Tribunal has held as under: "8.4 Services used by the Head Office (ISD) : Cenvat Credit in respect of courier service, mandap keeper service, event management, cargo handling and C&F service has been denied on....
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....e, only two limitations are put for the distribution of credit by an input service distributor. Firstly, it cannot exceed the amount of service tax paid and secondly, the credit of service tax attributable to service used shall not be distributed in a unit exclusively engaged in the manufacture of exempted goods or providing of exempted services. 9. In fact, the Board has issued a circular clarifying in this regard, which is extracted by the tribunal at para 7 which reads as under:- "Para 7. Para 2.3 of the Master Circular referred to by the ld. Advocate reads as under :- "2.3 An 'Input service distributor' is an office or establishment of a manufacturer of excisable goods or provider of taxable service. It receives tax paid invoices/bills of input services procured (on which Cenvat credits can be taken) and distributes such credits to its units providing taxable services or manufacturing excisable goods. The distribution of credit is subject to the conditions that - (a) the credit distributed against an eligible document shall not exceed the amount of service tax paid thereon, and (b) credit of service tax attributable to services used in a unit either e....