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TMI Blog2019 (3) TMI 1046X X X X Extracts X X X X X X X X Extracts X X X X ..... n the input services to its manufacturing units provided the credit distributed does not exceed the amount of service tax paid and that the credit of service tax attributable to a particular unit shall be distributed only to that unit. The credit shall be allowed on the basis of invoice/ Bill/ challan issued by an office of premise of said provider of output service. The provisions makes it clear that the credit if distributed by ISD if is found ineligible credit, the same can be reversed by the ISD itself. If the reversal is prior utilisation of credit, no question of interest and penalty at all arises - In the present case, it is an acknowledged fact that out of the total proposed credit of ₹ 56,70,178/- the amount of ₹ 47, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... istributor (ISD) who have been passing the credit of service tax paid on services which have no relation with the manufacture of soap. Accordingly, several SCNs as mentioned below were served demanding the recovery of the respective inadmissible cenvat credit alongwith the interest and the penalties (cenvat credit reversed) The main defence of the appellant before the Department had been that the maximum cenvat credit has been reversed. The details are as follows: Sr. No. SCN No./ Statement of demand no and date Period Cenvat credit amount involved Cenvat Credit Reversed 1. V(34)15-02/14-15/Adj-II ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner (Appeals) who vide the Order-in-Appeal No. 176-18-19 dated 31.07.2018 had set aside the demand of ₹ 7,82,068/- alongwith the interest and equal mandatory penalty in respect of 5 SCNs issued for the period from November, 2014 to March, 2016. The demand of ₹ 4,54,820/- alongwith the interest and penalty was also set aside. However, demand of ₹ 44,33,290/- with respect to first SCN for the period from November 2014 to March 2017 was confirmed and the respective penalty was reduced to ₹ 23,68,610/- instead of ₹ 48,88,110/-. The Appeal was accordingly modified as partly allowed. Still being aggrieved, the Appellant is before this Tribunal. 2. I have heard Mr. Ghanshyam Giri, Ld. Advocate for the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is no ground for imposition of interest and penalty. Order under challenge is prayed to be set aside, Appeal is prayed to be allowed. 4. Per contra, Ld. DR while justifying the Order has submitted that Commissioner(Appeals) has been highly reasonable while appreciating the eligible and ineligible inputs for cenvat credit. The demand qua various other services has reasonably been dropped by Commissioner Appeals. The confirmed demand is mainly about the construction services which are not the eligible inputs for availing credit distrubtion thereof by ISD has no meaning. Appeal is accordingly prayed to be dismissed. 5. After hearing both the parties and perusing the record, I observe that initially six SCNs as detailed above were serve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... output service. 7. These provisions makes it clear that the credit if distributed by ISD if is found ineligible credit, the same can be reversed by the ISD itself. If the reversal is prior utilisation of credit, no question of interest and penalty at all arises. In the present case, it is an acknowledged fact that out of the total proposed credit of ₹ 56,70,178/- the amount of ₹ 47,11,370/- has already been reversed and that all other demands have been dropped except for the demand of 1st SCN for reversal of credit of ₹ 44,33,290/-. It becomes clear that the amount reversed satisfy the demand even of SCN dated 15.01.2015 alleging the construction services to be ineligible input. To my opinion Department was not justifie ..... X X X X Extracts X X X X X X X X Extracts X X X X
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