Custom, Excise & Service Tax Tribunal
M/S. Asian Paints Ltd vs Cce, Chennai on 4 March, 2010
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT CHENNAI
E/S/31/2010 and E/49/2010
(Arising out of Order-in-Appeal No. 93/2009 (P) dated 28.10.209 passed by the Commissioner of Central Excise (Appeals), Chennai)
M/s. Asian Paints Ltd. Appellants
Vs.
CCE, Chennai Respondent
Appearance Shri Gopal Krishna Mundhra, Manager (Excise) for the Appellants Smt. Indira Sisupal, JDR for the Respondent CORAM Honble Dr. Chittaranjan Satapathy, Technical Member Date of Hearing: 04.03.2010 Date of Decision: 04.03.2010 Stay Order No. _____________ Final Order No. ____________ Heard both sides. Shri Gopal Krishna Mundhra, Manager (Excise) of the appellant-company states that the appellants main unit in Mumbai has distributed the service tax credit to the Cuddalore Unit which has been disallowed by the authorities below on the ground that the credit does not relate to the Cuddalore Unit. He states that a similar case was dealt by the Bangalore Bench of the Tribunal vide M/s. ECOF Industries Pvt. Ltd. Vs. CCE, Bangalore 2009-TIOL-2109-CESTAT-BANG and the issue was decided in favour of the appellants. He prays for similar decision in the present case.
2. Heard the learned DR Ms. Indira Sisupal who supports the impugned order on the ground that the credit distributed to the appellants unit in Cuddalore does not relate to the service utilized by this unit.
3. After hearing both sides I find that a similar issue has been dealt in the case of ECOF Industries (supra) and the appeal was allowed in that case on the following grounds:-
The combined reading of the Rule 7 and the clarificatory circular dt.23/8/2007 hereby shows that there are only two restrictions regarding the distribution of the credit. The first restriction is that the credit should not exceed the amount of Service Tax paid. The second restriction is that the credit should not be attributable to services used in manufacture of exempted goods or providing of exempted services. There are no other restrictions under the rules, the restriction sought to be applied by the Department in this case in limiting the distribution of the Service Tax credit made in respect of the Malur Unit on the ground that the services were used in respect of the Cuttack Unit finds no mention in the relevant rules. As such, restricting the distribution of Service Tax credit in a manner as has been done by the impugned order by the lower appellate authority (original authority had approved of such distribution) cannot be upheld. In case the Department wants to place such restriction as is sought to be placed in the case, the rule is required to be amended.
4. Following the ratio of the aforesaid order, I find that the appellants are entitled to the credit in the present case. As such, the requirement of predeposit is waived and the impugned order is set aside and the appeal is allowed. (Dictated and pronounced in open court) (Dr. Chittaranjan Satapathy) Technical Member Rex ??
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