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TMI Blog2022 (5) TMI 1199X X X X Extracts X X X X X X X X Extracts X X X X ..... aka High Court in the case of COMMISSIONER OF C. EX., BANGALORE-I VERSUS ECOF INDUSTRIES PVT. LTD. [ 2011 (2) TMI 1130 - KARNATAKA HIGH COURT] wherein it was held by the Court that Merely because the input service tax is paid at a particular unit and the benefit is sought to be availed at another unit, the same is not prohibited under law. It is in this context, the manufacturer is expected to register himself as a input service distributor and thereafter, he is entitled to distribution of credit of such input in the manner prescribed under law - in the instant case of the Appellant also there is no dispute as to the availment of Cenvat credit by the Appellant and the distribution by ISD. The only allegation raised in that the said servi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e claimed from the date of wrong availment of CENVAT credit and that the interest would be payable from the date CENVAT credit is taken or utilized wrongly - In the instant case of the appellant it is not disputed that the said amounts has been utilised by the Appellant also, hence considering the above we are of the opinion that interest is payable by the Appellant for the amounts utilised towards payment of service tax from the date of availment till the due date of availment and for the purposes of computation of the same, we remand the matter to the adjudicating authority. Penalty - HELD THAT:- Since the demand of Cenvat credit itself has been dropped in the adjudication proceedings, the question of imposition of penalty under Ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ISD credit by the Tirupati unit for materials used in other units, the Appellant has submitted that there was no restriction in availment of Cenvat credit as distributed by the ISD unit under Rule 7 of the CCR, 2004. We find that the issue in this regard is settled by the judgment of the Hon ble Karnataka High Court in the case of COMMISSIONER OF C. EX., BANGALORE-I Versus ECOF INDUSTRIES PVT. LTD. [2011 (271) E.L.T. 58 (Kar.)] wherein it was held by the Court as- 8 . It is in this context, the definition of input service distributor makes it clear that a manufacturer or a producer of a final product or a provider of output service may have more than one unit and may be distributed in various parts of the country. It is in this backgr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ods or providing of exempted services shall not be distributed. Therefore, only two limitations are put for the distribution of credit by an input service distributor. Firstly, it cannot exceed the amount of service tax paid and secondly, the credit of service tax attributable to service used shall not be distributed in a unit exclusively engaged in the manufacture of exempted goods or providing of exempted services. 9 . In fact, the Board has issued a circular clarifying in this regard, which is extracted by the tribunal at para 7 which reads as under :- Para 7. Para 2.3 of the Master Circular referred to by the ld. Advocate reads as under :- 2.3 An Input service distributor is an office or establishment of a ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore it is dismissed. We find in the instant case of the Appellant also there is no dispute as to the availment of Cenvat credit by the Appellant and the distribution by ISD. The only allegation raised in that the said services are not used by the Appellant and hence Cenvat credit should not be allowed. Since the above issue is already settled by the judgment supra, we are of the view that the demand in this case also is liable to be set aside and we order so. 4. As regards the next issue of utilisation of excess Cenvat credit by ignoring the provisions of Rule 6(3)(c) of the CCR, 2004, we find that the Appellant has produced certain reconciliations by way of additional submissions which were not produced before the lower authorities ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n levied or paid or has been short levied or short paid or erroneously refunded, the person liable to pay duty, shall in addition to the duty is liable to pay interest. Section do not stipulate interest is payable from the date of book entry, showing entitlement of Cenvat credit. Interest cannot be claimed from the date of wrong availment of CENVAT credit and that the interest would be payable from the date CENVAT credit is taken or utilized wrongly. 6. In the instant case of the appellant it is not disputed that the said amounts has been utilised by the Appellant also, hence considering the above we are of the opinion that interest is payable by the Appellant for the amounts utilised towards payment of service tax from the date of av ..... X X X X Extracts X X X X X X X X Extracts X X X X
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