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TMI Blog2017 (7) TMI 985X X X X Extracts X X X X X X X X Extracts X X X X ..... supplied by its Howrah unit in terms of Rule 4(5)(a) of the Cenvat Credit Rules and removed without payment of duty to the Howrah unit (the principal manufacturer). A Show Cause Notice dated 15.10.2012 was issued for disallowance and recovery of Cenvat Credit of Rs. 24,26,886/- along with interest and to impose penalty. It has been alleged that the appellant's Head Office, a regd. input service distributor (ISD) distributed Service Tax paid on renting of immovable property service, lease rent for usages of Land & Building and Plant & Machinery (input service) by their Bhadreshwar unit who is engaged exclusively as a job-worker and the manufacturer of exempted goods under Rule 4(5)(a) of the Cenvat Credit Rules, 2004 and also providing B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trongly argued that Rule 7 of the Cenvat Credit Rules provides the manner in which an Input Service Distributor may distribute Cenvat Credit to the manufacturing unit subject to the following conditions:- (a) The credit distributed against a document referred to in Rule 9 does not exceed the amount of service tax paid thereon; or (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. In terms of Rule 7(b), as above, the service tax attributable to service used in a unit exclusively engaged in the manufacture of exempted goods is not available. The expression exclusively appearing in the said Rule relates to the unit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence, neither the arguments advanced by the Noticee nor the judgements relied upon by them are of no avail to them as per my findings hereinbefore." 5. Heard both sides and perused the appeal records. 6. The ld.Counsel for the appellant submitted that the Bhadreshwar unit is the job-worker of the Howrah unit who manufactured the final product and cleared on payment of duty. It is submitted that the Bhadreshwar unit is not exclusively engaged in the manufacture of exempted goods. He relied upon the following decisions:- (a) Commissioner of C.Ex., Bangalore-I v. ECOF Industries Pvt. Ltd. [2013 (29) S.T.R. 107 (Kar.)] (b) Fosroc Chemicals India Pvt.Ltd. v. C.C.E., Cus. & S.T., Bangalore-LTU [2016 (42) S.T.R. 28 (Tri.-Bang.)] 7. On the ot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of duty. Similarly, as per Rule 2(e) of Cenvat Credit Rules, 2004, exempted service means a taxable service which is exempt from the whole of the Service Tax leviable thereon. In the present case, the job-work materials of the Bhadreshwar unit cannot be treated as exempted goods as the Howrah Unit paid duty thereon. Hence, it cannot be said that the Bhadreshwar unit is exclusively engaged in the manufacture of exempted goods. In any event, Rule 4(5)(a) has not given any exemption from the levy of duty on the job-worked material. Therefore, the findings of the lower authorities cannot be sustained. 9. In view of the above discussions, the impugned order is set aside. The appeal filed by the appellant is allowed. (Pronounced in the open cou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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