2017 (11) TMI 1169 - AT - Central Excise

CENVAT credit - GTA service - whether the appellant is entitle for Cenvat credit on input service distributor s invoice issued by their regional office in respect of GTA service? - Held that - amended Rule 7 w.e.f. 17-3-2012 vide N/N. 18/12-CE(N.T.) dated 17-3-2012 which is effective from 1-4-2012 as per clause (d) the credit of service tax attributable to service used in more than unit shall be distributed on pro rata basis on the basis of the turnover of the concerned unit to the sum total of the turnover of all the units to which the service related - appellant is entitle only to the extent of credit of service tax attributed to the turnover of their unit. The facts were not verified - the adjudicating authority needs to examine proportionate credit in terms of Rule 7 - appeal allowed by way of remand.

Summary

Issues involved:
Whether the appellant is entitled to Cenvat credit on input service distributor's invoice issued by their regional office in respect of GTA service.

Analysis:

Issue 1: Cenvat credit eligibility pre-17-3-2012
The appellant argued that until 17-3-2012, credit on the ISD invoice is admissible only if Rule 7 of Cenvat Credit Rules, 2004 is satisfied. The appellant relied on the case law of ECOF Industries Ltd Vs. CCE and a decision of the Tribunal in M/s. Akzo Nobel India Ltd Vs. CCE Belapur. The Tribunal found that the conditions under unamended Rule 7 were met, allowing credit for the period before 17-3-2012.

Issue 2: Cenvat credit eligibility post-17-3-2012
Post-amendment, Rule 7 required pro-rata distribution of credit based on turnover of units. The Tribunal noted that the appellant was entitled only to the credit attributed to their unit's turnover. However, this verification was not done. Referring to a previous decision in the appellant's case, the Tribunal remanded the matter to the adjudicating authority for examining the proportionate credit under Rule 7 for the period from 1-4-2012 onwards.

Conclusion:
The Tribunal partly allowed the appeal, setting aside the demand for Cenvat credit up to 31-3-2012 based on unamended Rule 7. For the period post-17-3-2012, the matter was remanded to the adjudicating authority for verifying the pro-rata credit distribution as per the amended Rule 7. The judgment was pronounced on 31/10/2017.