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2012 (8) TMI 566 - AT - Central ExciseCENVAT credit Held that - Appellant has not registered with the department as input service tax credit distributor, he cannot distribute service tax credit in respect of services availed elsewhere than in the unit where manufacturing activity is taking place and duty liability is discharged - appellant directed to make a pre-deposit
Issues:
- Availment of CENVAT credit on input services at different units - Admissibility of input service tax credit in units without manufacturing activity - Entitlement for CENVAT credit distribution Analysis: 1. The appellant, engaged in manufacturing goods falling under Chapter 76, availed CENVAT credit on inputs and capital goods at their factory, along with service tax credit on input services at various units. A show cause notice was issued proposing to deny service tax credit amounting to Rs. 2,24,508 on specific services for the period April 2006 to January 2009. The jurisdictional Assistant Commissioner confirmed the demand, imposed interest and penalty, which was upheld by the Commissioner (Appeals), leading to the appeal before the Tribunal. 2. The appellant's counsel argued that the Pirangut and Wai units are their own, with the former engaged in job work and the latter intended for manufacturing excisable goods in the future. They contended that since the services were utilized at these units, they were entitled to claim CENVAT credit or distribute service tax credit to their main unit. On the contrary, the Revenue's representative contended that credit is not admissible in units without manufacturing activity and registration for input service tax credit distribution. 3. Upon reviewing the submissions, it was noted that the input services were indeed provided at units where no manufacturing activity was taking place, unlike the unit where manufacturing activities and duty liability were discharged. As the appellant had not registered as an input service tax credit distributor, they were not entitled to distribute service tax credit for services availed outside the manufacturing unit. Consequently, the Tribunal directed the appellant to make a pre-deposit of Rs. 1.12 lakhs within four weeks, with the balance amount waived upon compliance, and recovery stayed during the appeal's pendency.
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