Custom, Excise & Service Tax Tribunal
Commissioner Of Central Excise, ... vs M/S. Sree Sakthi Paper Mills Ltd on 22 September, 2017
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Appeal(s) Involved: E/21717/2015-SM [Arising out of Order-in-Appeal No. COC-EXCUS-000-APP-014-15-16 dated 28/04/2015 passed by Commissioner of Central Excise, COCHIN (Appeal).] Commissioner of Central Excise, Customs and Service Tax Cochin-CCE C R BUILDING, I S PRESS ROAD, ERNAKULAM, COCHIN, - 682018 KERALA Appellant(s) Versus M/s. Sree Sakthi Paper Mills Ltd Unit1,edayar Development Area, Muppathadom P.O Kerala - 683110 Respondent(s)
Appearance:
Dr. J. Harish, AR For the Appellant None (Written Submissions) For the Respondent Date of Hearing: 22/09/2017 Date of Decision: 22/09/2017 CORAM:
HON'BLE SHRI M.V.RAVINDRAN, JUDICIAL MEMBER Final Order No. 22229 / 2017 Per : M.V.RAVINDRAN This appeal is filed by the Revenue against Order-in-Appeal No. COC-EXCUS-000-APP-014-15-16 dated 28/04/2015.
2. None appeared for the respondent. Respondent has filed Cross Objection with a prayer to consider the same for final disposal of the appeal. The said cross objection is considered.
3. Heard the learned DR and perused the records.
4. The adjudicating authority in this case has confirmed the demands raised for availment of ineligible CENVAT credit on the ground that respondent had availed CENVAT credit on documents which distributed the service tax in respect of the activity undertaken by another unit of the respondent. The first appellate authority on an appeal, set aside the impugned order and held in favour of the respondent-assessee.
5. On perusal of the records, I find that there is no dispute as to the fact that the respondents Head Office is registered as Input Service Distributor (ISD) and is eligible to issue the input service distributor invoice for the period in question 1.4.2009 to 30.9.2009. The first appellate authority in paragraph No.11 has correctly followed the law as laid down by the Honble High Court of Karnataka in the case of ECOF Industries Pvt. Ltd.: 2012 (277) ELT 317 (Kar.) wherein their Lordships have clearly held that as under:
4.?The assessee had availed the Service tax credit based on the invoices issued by the Chennai office indicating that the Service tax are taken by their unit at Malur. That the Service tax paid by the Chennai unit pertains to advertisement of their product Sabena Dish Wash Bar which was manufactured by their Cuttack Unit and not by the unit at Malur. Therefore, the assessee was dealing with the very same product. Rule 7 of the Cenvat Credit Rules governs procedure/manner of distribution of credit by input service distributor by imposing two conditions therein, which are as follows :
a. Credit distributed under the invoice of ISD does not exceed the amount of Service tax paid.
b. Credit of Service exclusively used for exempted goods or exempt service is not distributed.
5.?Therefore, the assessee is entitled to distribute the Cenvat credit on the input services on its manufacturing unit or other units providing the output services. The view taken in the order in appeal that the distribution of credit is for the advertisement of the product, which is not at all manufactured at Malur Unit, therefore, cannot be accepted. The finding recorded by the Appellate Authority that the assessee is entitled to take credit only in the unit where the product is manufactured is therefore not the mandate of Rule 7 of the Cenvat Credit Rules.
6. In view of the fact that the law is now fairly settled for the relevant period when CENVAT credit rules were not in the statute. Accordingly, I find that the impugned order is correct and legal and does not suffer from any infirmity and the appeal is rejected.
(Order was dictated in Open Court on 22/09/2017) M.V.RAVINDRAN JUDICIAL MEMBER rv 3