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TMI Blog2017 (12) TMI 384X X X X Extracts X X X X X X X X Extracts X X X X ..... ng activities then the distribution of credit exclusively attributable to such unit will result in revenue loss to the Government. Thus, apparently there is no revenue neutrality in the instant case. In the instant case Rule 7 (c) of the Cenvat Credit Rules, 2004 is attracted in respect of renting immovable property and telephone services - also, no evidence of Revenue neutrality has been produced. Since the appellants are, inter alia engaged in the trading activity also, there is no revenue neutrality as part of the credit attributable to the trading activity is not available to the appellants. Appeal dismissed - decided against Revenue. - E/86809/17 & E/86810/17, E/CO/91131/17 & E/CO/91132/17 - A/91397-91398/2017 - Dated:- 5-12-201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. Ld. Counsel for the respondent relied on the impugned order. He further argued that there is no dispute regarding the eligibility of credit on input service. He argued that services of renting of premises and telephone are commonly used for overall business, i.e. manufacturing units and service units of the respondent and credit has been rightly distributed by the ISD in terms of the provisions of sub-rule 7 (d) of the Cenvat Credit Rules, 2004. He pointed out that the respondents have wide spread business operation across the country. They have various manufacturing units as well as business units are carrying on business of the respondents. He further pointed out that their branch office like after overall business operation and provid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hone service, cannot be dismissed. Renting of immovable property service and telephone services can be exclusively identified as used wholly by one unit. In these circumstances, it may attract the mischief of Rule 7 (c) of the Cenvat Credit Rules. A perusal of other services on which no objection has been raised would show that none of them can not be identified as exclusively used by one unit and therefore, the Revenue is correct in distinguishing between these 19 services and services of renting of immovable property and telephone services. Rule 7 of the Cenvat Credit Rules prescribed as follows: Rule 7 : Manner of distribution of credit by input service distributor: The input service distributor may distribute the Cenvat Credit in r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e availability of an alternate scheme; (b) Where the scheme opted for by the assessee is found to have been misused (in contradistinction to mere deviation or failure to observe all the conditions) the existence of an alternate scheme would not be an acceptable defence; (c) With particular reference to Modvat scheme (which has occasioned this reference) it has to be shown that the Revenue neutral situation comes about in relation to the credit available to the assessee himself and not by way of availability of credit to the buyer of the assessee's manufactured goods; (d) We express our opinion in favour of the view taken in the case of M/s. International Auto Products (P) Ltd. (supra) and endorse the proposition that o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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