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TMI Blog2022 (10) TMI 875X X X X Extracts X X X X X X X X Extracts X X X X ..... 72-51579 OF 2019 - FINAL ORDER Nos. 50981 - 50988/2022 - Dated:- 20-10-2022 - MR. ANIL CHOUDHARY, MEMBER (JUDICIAL) AND MR. P. V. SUBBA RAO, MEMBER (TECHNICAL) Sh. Sachin Chitnis, Advocate for the appellant Sh. Sanjay Kumar Singh, Authorised Representative for the respondent ORDER The issue involved in this batch of appeals is - whether issuance of Input Service Distributor (ISD) invoice by M/s Parle Biscuits Pvt. Limited to its contract manufacturing unit (M/s M.B. Industries Pvt. Ltd.,) is legal and correct when the contract manufacturing is carried in terms of Notification No. 36/2001-CE (NT). 2. The details of appeals are as follows:- Sl. No. Appellants Appeal No. Duty (Rs.) Penalty (Rs.) 1 M/s M. B. Industries Pvt. Ltd., E/51572/2019 1,12,81,585/- 1,12,81,585/- 2 M/s Parle Biscuits Pvt. Ltd., E/51573/2019 - 12,00,000/- 3 M. V. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ject to such conditions or limitations as may be specified in the notification, specify person or class of persons who may not require such registration. iv. Notification No.36/2001-CE (NT) dated 26.6.2001 has been issued under Rule 9(2) of the 2001 Rules and provides exemption from registration to the Contract Manufacturing Unit subject to conditions and stipulations. v. Rule 2(m) read with Rule 7 of CCR, 2004, provides a facility to an office of manufacturer of final product to distribute cenvat credit in respect of service tax paid on the input service to its manufacturing unit, wherein manufacturing unit need not be owned by the input service distributor and the expression its manufacturing unit would also include a manufacturer manufacturing on behalf of the principal manufacturer. vi. The Appellants are engaged in manufacture of Biscuits falling under Heading 1905 of the erstwhile Central Excise Tariff exclusively for PBPL, under their brand name as a CMU, in terms of Clause (ii) of Notification No.36/2001-CE(NT) dated 26.6.2001. vii. Accordingly, PBPL filed an authorisation/letter dated 27.07.2012 (Page No. 94)/23.11.2009 (Page No. 94) as required under the Not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... portional credit of the aforesaid services to each of the CMUs, including the Appellants, based on the turnover of each of the CMUs. The factories of PBPL as well as CMUs were accounting the credit under ISD invoices and utilising the same for payment of central excise duty on the clearance of final products being manufactured by each of the Units. xii. PBPL-ISD distributed the specified amount of credit of service tax paid on input services like marketing, sales promotions, market research, etc. inter-alia to the Appellants, during the period June 2013 to March 2015, under the cover of ISD invoices, issued under Rule 4A of STR and the Appellants took credit of the same in their Cenvat Account and utilized the same for payment of excise duty on the Biscuits exclusively manufactured and cleared to PBPL. The Appellants understand that PBPL-ISD had distributed such proportional credit to other CMUs also, alike the Appellants. The credit taken and utilized was reflected in the Cenvat Account and periodical Returns (ER-1 ST-3) filed from time to time. xiii. Thus, the inputs required for manufacture of the Biscuits on contract manufacturing basis are procured by PBPL, which were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In any case, the issue whether input service credit distributed by M/s.Parle Biscuits Pvt. Ltd., the Principal Manufacturer as an Input Service Distributor (ISD) to Contract Manufacturing Unit working on job-work basis, is admissible and could be distributed by ISD only to its own manufacturing units as per Rule 7 of CCR, which would include Contract Manufacturing Unit is no more res-integra based on larger bench of Hon ble CESTAT in the case of Krishna Food Products 2021-TIOL-294-CESTAT-DEL-LB. xix. In any case, once the issue was referred to larger bench, extended period as well as penal provisions are not invokable, hence the demand for the period June 2013 to May 2015 is barred by limitation. xx. In view of the above submissions and those made in grounds of appeal, the Appellants pray for allowing their appeals with consequential relief. 5. Learned Authorised Representative for the Revenue relies on the impugned order. 6. Having considered the rival contentions, we find that the issue herein is squarely covered in favour of the appellant by the Larger Bench ruling of this Tribunal in the case of Krishna Food Products (supra). Under similar facts and circumstance ..... X X X X Extracts X X X X X X X X Extracts X X X X
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