Custom, Excise & Service Tax Tribunal
Hindustan Coca-Cola Beverages Pvt Ltd vs Commissioner Of Central Excise & ... on 25 September, 2025
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
NEW DELHI
PRINCIPAL BENCH - COURT NO. - IV
Excise Appeal No. 50527 of 2024
[Arising out of Order-in-Original No. 3-6/Pr. Commr./C.Ex./BPL/2023-24 dated
30.11.2023 passed by the Commissioner of CGST & Central Excise, Bhopal]
M/s. Hindustan Coca-Cola Beverages Pvt. Ltd. ...Appellant
Plot No. 169/175, Industrial Area,
Pilukhedi, District-Rajgarh (MP)
VERSUS
Commissioner of Central Excise & CGST -
Bhopal ...Respondent
35-C, GST Bhawan, Administrative Area, Arera Hills, Bhopal - 462011 WITH Excise Appeals of the Year 2024 50318 50319 50320 50321 50322 50323 50324 50325 50326 50327 50328 50329 50330 50331 50332 50333 50334 50335 50336 50337 50338 50339 50340 50341 50342 50343 50344 50345 50346 50347 50348 50349 50350 50351 50352 50353 50354 50355 50471 50525 50526 50528 APPEARANCE:
Shri Monish Panda and Ms. Amrita Singh, Advocates for the Appellant Shri Rohit Issar, Authorized Representative for the Respondent CORAM:
HON'BLE DR. RACHNA GUPTA, MEMBER (JUDICIAL) DATE OF HEARING: 26.05.2025 DATE OF DECISION: 25.09.2025 FINAL ORDER NO. 51465-51507/2025 DR. RACHNA GUPTA Present order disposes of 43 appeals, all pertaining to the same appellant and involving the same issue of denial of availment 2 Excise Appeal No. 50527 of 2024 & Ors.
of Cenvat credit on the basis of invoices issued by Input Service Distributor (ISD). Present appeal is filed against Order-in-Original No. 3-6/2023-24 dated 30.11.2023. The facts in brief which culminated into the impugned order are:
1.1 M/s. Hindustan Coca-Cola Beverages Pvt. Ltd., the appellant herein, is the manufacturer of various types of aerated water, fruit juice and pulp-based drinks and packaged drinking water which are sold under various brand names. The appellant Company has many manufacturing units locates in different parts of the country and several ISD offices of the appellant company are attached to such manufacturing units are also located apart and are registered with their jurisdictional Commissionerate. Each of the Depot and marketing office of the company avail various services from different service providers to undertake their operations. The appellants are availing Cenvat credit in respect of their 'inputs' and 'input services'.
1.2 During the course of audit of records of the appellants for the period 2012-13 to June 2017, the department observed that appellant had availed and utilized input service credit in respect of following services:
Telecommunication Maintenance and Repair Courier Photocopying (Business Auxiliary) Security Architect 3 Excise Appeal No. 50527 of 2024 & Ors.
Insurance Real Estate/Properties Rent-a-Cab Outdoor Catering 1.3 The said services were found to have been received by the various offices of the appellants which are registered as Input Service Distributors for distribution of the service tax credit on various services received by them. All such ISDs have been made the co-noticees by the department.Keeping in view the amendment in the definition of input service in Rule 2(l) of Cenvat Credit Rules, 2004 with effect from 01.3.2011 vide Notification No. 3/11 dated 01.03.2011 department formed the opinion that post said amendment Cenvt credit of service tax paid on input services is available only on services which are used in manufacture of goods and on 19 services specified in inclusion clause of Rule 2(l) of Cenvat Credit Rules, 2004. However the aforesaid services were alleged to not to fall under any of said categories. Accordingly,four show cause notices were served upon the appellant. The details are as follows:
Particulars Showca Showcause Showcaus Showcau use notice-2 e notice-3 se notice- notice-4 1 Date of show 18.03.2016 20.07.2016 19.04.2018 05.07.2019 cause notice Date of O-I-O 27.04.2018 27.04.2018 01.05.2019 11.12.2019 Appeal 53065/2018 53186/2018 51040/2019 50737/2020 No. Period 2012-13to 2015-16 2016-17 April,2017 of 2014-15 -
Dispute June,2017
Demand Rs.4,87,98,63 Rs.6,03,84,290/- Rs.6,17,33,667/- Rs.5,58,15,418
3/- /-
Penalty Rs.4,87,98,63 Rs.6,03,84,290/- Rs.6,17,33,667/- Rs.5,58,15,418
3/- /-
Penalty Rs.25,00,000/ Rs.25,00,000/- Rs.1,00,000/- Rs.1,00,000/-
on each -
4
Excise Appeal No. 50527 of 2024 & Ors.
ISD
ISD(Co- Mumbai Mumbai Mumbai Mumbai
Noticees) (50028/2020) (50032/2020) (52343/2019) (50731/2020)
with Gurgaon Pune Pune Pune
Appeal (50027/2020) (50040/2020) (52347/2019) (50733/2020)
Number Jaipur Jaipur Jaipur Jaipur
(50029/2020) (50026/2020) (52345/2019) (50732/2020)
Gujarat Gujarat Gujarat Gujarat
(50042/2020) (50033/2020) (52340/2019) (50735/2020)
Noida Noida Noida Noida
(50038/2020) (50034/2020) (52338/2019) (50736/2020)
Hebbal, Hebbal, Hebbal, Hebbal,
Bangalor Bangalore Bangalore Bangalor
e (50036/2020) (52344/2019) e
(50043/2020) (50734/2020)
Bhopal Bhopal Bhopal Pilukhedi,
(50044/2020) (50035/2018) (52339/2019) Rajgarh
(50738/2020)
Jalpaiguri Pilukhedi, Pilukhedi Goa
(50030/2020) Rajgarh Rajgarh (50737/2020)
(50029/2020) (4234/2019)
Hyderabad Goa Goa Kanpur
(50041/2020) (50037/2020) (52342/2019) (50740/2020)
Kanpur Kanpur Kanpur Kanpur
(50045/2020) (50039/2020) (52341/2019) (50739/2020)
OtherISD Gurgaon
(52346/2019)
The impugned Order-in-Original are passed pursuant to the directions of CESTAT in order dated 23.02.2022. Still being aggrieved the appellant is before this Tribunal.
2. I have heard Shri Monish Panda and Ms. Amrita Singh, learned Advocates for the appellant and Shri Rohit Issar, learned Authorized Representative for the department.
3. Learned counsel for the appellant has submitted the Appellant had availed Cenvat credit on the basis of the invoices of input services distributor a fact which is not in dispute. It is settled law that admissibility of availment of the credit on the invoice of ISD, the same has to be taken up with the said input service distributor (ISD) only. Learned counsel has relied upon following decisions:-
Castrol India Ltd. [2013 (291) E.L.T. 469 (Tri.-Ahmd.)]. 5
Excise Appeal No. 50527 of 2024 & Ors.
Godfrey Philips India Ltd. [2009 (239) E.L.T. 323 (Tri.- Ahmd.)].
Shriram Holographics [2016 (331) E.L.T. 0612 (Tri.- Del.)].
3.1 It is further submitted that earlier also several identical show cause notices have been issued against various offices of the appellant's company i.e. Hindustan Coca-Cola Beverages Ltd.
including that of appellant during the period ranging from September 2004 to March 2015 wherein the proposed demand has been dropped vide order of Commissioner (Appeals) dated 15.6.2009 and order of Deputy Commissioner dated 07.09.2010. 3.2 Learned counsel further submitted that demand in the present appeals have also been raised based on the same objection. No new ground has been taken while issuing the impugned statement of demand. The Adjudicating authority has failed to follow the determination orders passed with respect to the earlier showcase notices. Confirmation of demand contrary to the earlier orders is the violation of principles of judicial discipline. It is also submitted that even the quantification of demand, as was directed by this Tribunal in final order of remand dated 23.02.2022 is also absolutely erroneous. The Cenvat credit of Rs.10,95,526/- is wrongly computed, the amount actually is Rs.1,095,526/-. 3.3 It is finally submitted that the Cenvat credit availed is as per the amended definition of input services. The demand has wrongly been confirmed. Otherwise also, the demand, if any, should have been proposed and confirmed against the Input Service Distributors and not against the recipients of the invoices from the said ISD. The extended period of limitation has also been wrongly invoked 6 Excise Appeal No. 50527 of 2024 & Ors.
while issuing the impugned show cause notices as the appellant was being regularly audited. The entire issue was already to the notice of the department and there had earlier show cause notice being also issued by the department. The show cause notices are barred by time. Confirmation of demand on such showcase notices is liable to be set aside. Learned counsel has relied upon the following decisions:
John Deere India Pvt. Ltd. Vs. Commissioner of Central Excise, Pune-III reported as 2016 (41) STR 990 (Tri. Mumbai) Hindustan Coca Cola Beverages Pvt Ltd and Ors. Vs. the Commissioner of Customs, Excise and Service Tax (Appeals-I and III) and Ors. Reported as [2010]22STJ168(CESTAT-Bangalore) M/s. Hindustan Coca-Cola Beverages Pvt. Ltd. Vs. Assistant Commissioner, CGST & C.Ex. Division III, Bhiwadi Commissionerate, Order-in-Appeal No. KKS/268/Appeals Thane/BW/2023-24 dated 30.01.2024.
M/s. FIEM Industries Ltd. Vs. CCE, Chennai-III reported as 2016 SCC OnLine CESTAT 1958 Abon Loyd Chiles Offshore Ltd. & Ors. Vs. Commissioner of Customs, Maharashtra With these submissions, the appeals are prayed to be allowed.
4. Learned Departmental Representative, on the contrary, has reiterated the findings of the impugned order. Impressing upon no 7 Excise Appeal No. 50527 of 2024 & Ors.
infirmity in the order under challenge, the appeals are prayed to be dismissed.
5. Having heard both the parties. I observe and hold as follows:
The issue to be adjudicated herein is:
"Whether the Cenvat credit availed based on the invoices issued by Input Service Distributors (ISD) is admissible to the appellants or not?"
5.1 Foremost I have perused the definition of Input Service Distributor given in Rule 2(m) of Cenvat Credit Rules, 2004. It reads as follows:
"2(m) input service distributor" means an office of the manufacturer or producer of final products or provider of output service, which receives invoices issued under rule 4A of the Service Tax Rules, 1994 towards purchases of input services and issues invoice, bill or, as the case may be, challan for the purposes of distributing the credit of service tax paid on the said services to such manufacturer or producer or provider, as the case may be;"
5.2 This definition clarifies that the ISD is also the manufacturer. Rule 7 of Cenvat Credit Rules prescribes the manner of distribution of Cenvat credit. The rule reads as follows:
"Rule 7. Manner of distribution of credit by input service distributor.- The input service distributor may distribute the Cenvat credit in respect of the service tax paid on the input service to its manufacturing units or units providing output service, subject to the 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 8 Excise Appeal No. 50527 of 2024 & Ors.
(b) credit of service tax attributable to service used in a unit exclusively engaged in manufacture of exempted goods or providing of exempted services shall not be distributed."
5.3 I Observe that there is no allegation against the appellant about violation of said Rule 7. The availment and utilization of Cenvat credit has been denied on the allegations that it has been availed and utilized against the documents in respect of which the appellants were not able to prove that the services involved in the ISD invoices are input services in terms of definition of input services under rule 2(l) of Cenvat Credit Rules, 2004. I have perused the said rule. It reads as follows:
Rule 2(l) "input service" means any service, -
(i) used by a provider of [output service] for providing an output service; or
(ii) used by a manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products upto the place of removal, and includes services used in relation to modernisation, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage upto the place of removal, procurement of inputs, accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, security, business exhibition, legal services, inward transportation of inputs or capital goods and outward transportation upto the place of removal;
but excludes -
(A) service portion in the execution of a works contract and construction services including service listed under clause (b) of section 66E of the Finance Act (hereinafter referred as specified services) in so far as they are used for -
(a) construction or execution of works contract of a building or a civil structure or a part thereof; or
(b) laying of foundation or making of structures for support of capital goods, except for the provision of one or more of the specified services; or 9 Excise Appeal No. 50527 of 2024 & Ors.
(B) services provided by way of renting of a motor vehicle], in so far as they relate to a motor vehicle which is not a capital goods; or (BA) service of general insurance business, servicing, repair and maintenance, in so far as they relate to a motor vehicle which is not a capital goods, except when used by -
(a) a manufacturer of a motor vehicle in respect of a motor vehicle manufactured by such person; or
(b) an insurance company in respect of a motor vehicle insured or reinsured by such person; or (C) such as those provided in relation to outdoor catering, beauty treatment, health services, cosmetic and plastic surgery, membership of a club, health and fitness centre, life insurance, health insurance and travel benefits extended to employees on vacation such as Leave or Home Travel Concession, when such services are used primarily for personal use or consumption of any employee;"
5.4 A close reading of the rule in respect of a manufacturer like the appellant would bring three stages in which credits on input services is to be extended to the manufacturer - They are:
(a) Any service used by a manufacturer, whether directly or indirectly, in or in relation to the manufacturer of final products and clearance of final products up to the place of removal. A clear meaning that can emerge from this sentence is that whatever input services are utilised during the manufacturing process till the final product is brought for clearance would be covered within the definition of input service and the manufacturer is entitled to get credits on all those input services;
(b) The second component of Clause 2(ii) contains item wise categorisation of inputs which are peripheral to such 10 Excise Appeal No. 50527 of 2024 & Ors.
manufacturing process but may not be essential requirements to carry out the manufacturing. Those inputs are included within the definition for availment of CENVAT credits and when the unamended definition puts those in categories with starting words that reads "such as", the present Rule defines and confines it to those specific services like renovation modernization, advertisement sale promotion, marketing research, legal services etc. by way of substitution of the words "such as" with the word "includes". These services though are optional without which manufacturing can be completed, they have became some time essential to the manufacturing process under specific circumstances. For example availment of legal services will not be a requirement unless a dispute has arisen or relief is required to be sought in a court of law. Like wise advertisement and sales promotion would not be a requirement when there is a good market that would absorb the products soon after completion of its manufacturing. Therefore, substitution of word "such as"
in the Rule existing before 01.04.2011 by the word "includes"
and deletion of the word 'activities relating to business' has undoubtedly brought the input service definition out of an illustrative meaning to a definite meaning with an exhustive list for which no other item can be included in the definition of input service by way of inference. It is in this context the case laws cited by learned Authorised Representative namely Regional Director Vs. High Land Coffee Works - (1991) 3 SCC 617, Mahalakshmi Oil Mills Vs. State of Andhra Pradesh - (1989) 1 SCC 11 Excise Appeal No. 50527 of 2024 & Ors.
164, Bharat Coop. Bank (Mumbai) Ltd. Vs. Coop Bank Employees Union - (2007) 4 SCC 685, Good Year India Ltd. Vs. Collector of Customs - 1997 (95) ELT 450 etc. are relevant.
(c) In the definition of input service as introduced w.e.f. 01.04.2011, certain exclusions are provided under its sub clauses but as can be read from the definition reproduced above, those are not absolute exclusion but are conditional exclusions that has a link to specific purpose of availment and in the context of the issue under dispute before this Bench, it remained confined to sub Clause (c) on the categories namely outdoor catering service, travel benefit, membership of club etc., which when used primarily for personal use or consumption by the employees are to be excluded from availment of credits on those expenditures by the manufacturer. To put it in another way, outdoor catering or club membership or travel expenses as such would not disentitle a manufacturer to avail CENVAT credits on those expenses unless it fails to establish that those were not used primarily for the employees personal use or consumption. It is in this background that item wise rejection of Cenvat credit by the Commissioner (Appeals) is to be discussed. 5.5 It is clear from the above discussion that the definition of input service is wide enough to take into its ambit the services used whether directly or indirectly, in relation to the manufacture of final product and clearance of final product and include services used for various purposes including the services used in an office relating to 12 Excise Appeal No. 50527 of 2024 & Ors.
such factory or premises or activities relating to the business. Resultantly, I hold that all the input services, as already mentioned above, except for the two Rent-a-Cab and Outdoor Catering Services are the eligible input services. The outdoor catering service has been denied to be an eligible input service post amendment in the definition vide Notification No. 3/2011 dated 01.03.2011vide the decision of Larger Bench of this Tribunal in the case of Wipro Limited Vs. CCE Bangalore-III reported in 2018-TIOL-3256-CESTAT-BANG.-LB. The appellant itself has reversed the credit vis-à-vis Outdoor Catering and Remt-a-Cab Services which also gets covered under the afore discussed exclusion clause.
5.6 I have observed that the impugned four show cause notices and the respective Order-in-Originals, as mentioned in the table above, were first adjudicated by this Tribunal in a bunch of several appeals vide Final Order No. 50175-50206/2022 dated 23.02.2022. This Tribunal held as follows:
14. It is, therefore, a fit case where the matter should be remitted to the adjudicating authority for passing a fresh reasoned order after taking into consideration the reply submitted by the appellant. However, as stated by learned counsel for the appellant, the adjudicating authority need not examine on merits whether the appellant was entitled to take credit on rent-a-cab or outdoor catering, as it has been stated by the learned counsel appearing for the appellant that it is not assailing the demand of credit on these two services. The Commissioner shall, for these two services, examine the quantification part only.
15. The impugned orders dated 27.04.2018, 01.05.2019 and 11.12.2019 passed by the Commissioner are accordingly set aside and all the thirty two appeals are allowed. Needless to say, it will 13 Excise Appeal No. 50527 of 2024 & Ors.
be open to the appellant to submit fresh submissions within six weeks from today which shall be also taken into consideration by the adjudicating authority while deciding the matter. 5.7 The impugned order dated 30.11.2023 has been passed pursuant to the said directions. The authority has requantified the demand as follows:
S.NO SCN No. Demand of Cenvat Period Actual amount of . Credit as proposed Cenvat Credit in the SCN availed & utilized by the Noticee No. 1 on disputed input service.
A B C D E
1 07/Pr.Comm Rs.4,87,98,633/- 2012- Rs.10,95,526/-
r./CEX/BPL- 13 to
I/2016 dated 2014-
18.03.2016 15
2. 16/Pr.Comm Rs.6,03,84,290/- 2015- Rs.10,67,182/-
r/CEX/BPL- 16
II/2016
dated
20.07.2016
3. 04/Commr./ Rs.6,17,33,667/- 2016- Rs.5,76,410/-
CEX/ADJ- 17
I/BPL-
IV/2018
dated
19.04.2018
4. 04/Pr.Comm Rs.5,58,15,418/- April Rs.5,76,471
r./CEX/BPL- 2017 to
IV/2019 June
dated 2017
02.05.2019
5.8 However in the light of entire about discussion, it is held that
except for the Cenvat credit availed on Outdoor Catering Services and Rent-a-Cab Services, the appellant was entitled to avail the Cenvat credit of all other eight input services. Hence the order of requantification is liable to be set aside. Similarly in the light of the discussion about Rule 4(a)and Rule 7of Cenvat Credit Rules, 2004, as above, it is clear that availability of credit is related to the 14 Excise Appeal No. 50527 of 2024 & Ors.
manufacturer of goods or provider of output services as a whole and it is not restricted to any particular unit of the manufacturer/the service provider. The appellant admittedly have availed Cenvat credit on the basis of invoices distributed by their ISD registered unit that being so the admissibility of Cenvat credit could not have been questioned at the end of recipients units. If any investigation/inquiry was required to be made, it should have been at the end of ISD. I draw my support from the decision of this Tribunal in the case of Godfrey Phillips India Ltd reported as 2009 (239) ELT 323 (Tri. Ahmd.) wherein it has been held as follows:
"4.2 The definition of the input service distributor clearly says that he is not merely a dealer. The input service distributor has to be a office of the manufacturer or producer of final products or provider of output service who will distribute the credit to his manufacturing units or service providing units as the case may be. The dealer buys the manufactured goods on which duties have been paid and passes on the actual duty paid by issue of an invoice. He does not take any responsibility as regards eligibility of Cenvat credit by his buyers. He may not even be aware as to whether buyer avails the Cenvat credit or not. He does not produce any input services which he is required to distribute among others. Whereas an input service distributor independently receives invoice and in fact he could be compared to a buyer of goods or service from the manufacturer or a output service provider. The concept of input service distributor has been introduced in view of the fact that definition of input service includes "includes services used in relation to setting up, modernization, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage up to the place of removal, procurement of inputs, activities relating to business, such as accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, and security, 15 Excise Appeal No. 50527 of 2024 & Ors.
inward transportation of inputs or capital goods and outward transportation up to the place of removal". The definition shows that many of services could be performed in places other than where the manufacturer or receiver of the service might have been located and quite often a single manufacturer may be having several branches and services can be received in several places. 4.3 According to Rule 4A(2) of Service Tax Rules, 1994 every input services distributor distributing credit of taxable services is required to indicate the following details in the documents issued by him for distributing the credit viz.
(i) the name, address and registration number of the person providing input services and the serial number and date of invoice, bill, or as the case may be, challan issued under sub-rule (1);
(ii) the name and address of the said input services distributor;
(iii) the name and address of the recipient of the credit distributed;
(iv) the amount of the credit distributed.
5. When we look at the functions of the input service distributor and the documents to be issued by him for passing on the credit, it becomes quite clear that the document issued by him for passing on the credit does not contain the nature of service provided and the details of services. It contains the service provider‟s details, distributor‟s details and the amount. Obviously the eligibility or otherwise of the service tax credit has to be examined at the end of input service distributor only. This is further supported by the fact that both Central Excise assessees and Service Tax assessees are under the regime of self-assessment and therefore it is the assessee himself who has to specify that the credit availed by him is admissible. Therefore the input service distributor cannot say that he is not required to prove the eligibility or otherwise of the service tax credit since at the receiver‟s end which could be a branch or a factory of the distributor, no details would be available regarding the nature of service. Therefore the preliminary objection raised by the ld. Advocate has to be rejected and it has to be held that it is the responsibility of the jurisdictional officer with whom input service distributor has registered to decide the dispute regarding eligibility or otherwise of the service tax credit that the 16 Excise Appeal No. 50527 of 2024 & Ors.
input service distributor has taken and proposes to pass on to others."
Similar has been the findings in Castrol India Ltd. (supra). Hence, I hold that reversal of the Cenvat credit from the appellants, the recipient of invoices from their ISD has wrongly been confirmed.
5.9 Finally coming to the plea of Show notice being barred by time, I observe that the impugned show cause notices have been issued in continuation to the various earlier show cause notices as already mentioned above. Those earlier show cause notices stands already decided in favor of the appellants. it is an admitted fact that appellants were regularly been audited. The issue has been same in all previous show cause notices issued since the year 2004. The impugned show cause notices for the period 2012-13 to June 2017 cannot allege suppression of facts on part of the appellants. Resultantly, I hold that there was no reason with the department to invoke the extended period of limitation. The show cause notice is held barred by time. The demand proposed in the said show cause notices is liable to be set aside on this ground as well.
6. I draw my support from Nizam Sugar Factory Vs. Collector of Central excise, A.P. reported as 2006 (197) ELT 455 (S.C.) wherein it is held that when all relevant facts were in knowledge of authorities at the time of first show cause notice, while issuing subsequent show cause notices on same/similar facts, suppression of facts on part of assessee cannot at all be alleged. In view of this, it is held that invocation of extended period of limitation has also been wrongly confirmed. In totality of the entire above 17 Excise Appeal No. 50527 of 2024 & Ors.
discussion, the order under challenge is hereby set aside except for reversal of the Cenvat credit availed on Outdoor Catering Services and Rent-a-Cab Services. Consequent thereto, appeals stands allowed.
[Order pronounced in the open court on 25.09.2025] (DR. RACHNA GUPTA) MEMBER (JUDICIAL) HK