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TMI Blog2022 (10) TMI 1075X X X X Extracts X X X X X X X X Extracts X X X X ..... Larger Bench observed that there are substance substance in the contention advanced by learned counsel appearing for the appellant that the amended provisions of rule 2(m) and rule 7 of the CENVAT Rules, after the 01.04.2016, merely seek to rectify the lacuna in the unamended rules and, therefore, would have effect from the inception of the rules. In view of the aforesaid decision of the Larger Bench of Tribunal in Krishna Food Products, it has to be held that the Commissioner (Appeals) was not justified in denying CENVAT credit distributed by Parle prior to 01.04.2016. The order dated 25.03.2019 passed by the Commissioner (Appeals) to the extent is has denied such benefit is, therefore, set aside - the appeal is allowed. - EXCISE APPEAL NO. 51580 OF 2019 - FINAL ORDER NO. 51025/2022 - Dated:- 25-10-2022 - MR. DILIP GUPTA, PRESIDENT AND MR. P.V. SUBBA RAO, MEMBER (TECHNICAL) Shri J.M. Sharma, Consultant for the Appellant Shri Rakesh Agarwal, Authorized Representative for the Department ORDER The issue involved is to whether input service credit distributed by M/s. Parle Biscuits Pvt. Ltd. [ Parle ] to M/s. Shahi Food Product [ the appellant ] can be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : 3/12/2010 (Actual manufacturer or his authorized signatory) Cont 2/- 4. It has been stated that the inputs required for manufacture of the products were procured by Parle and supplied directly to the factory of the appellant on payment of excise duty. Parle pays for the inputs but the appellant takes credit of the same and utilizes the credit for payment of duty on the products cleared on account of Parle. The appellant also claims that it availed and utilized input services used in relation to the manufacture of products for Parle in accordance with the provision of the CENVAT Rules. 5. As the said product was manufactured not only in the factory of Parle but also in other factories of contract manufacturing units such as the appellant, the advertisement, market research, sales promotion and marketing were centralized and were being handled by the Corporate Office of Parle. Service tax paid on input services was subsequently distributed to these contract manufacturing units. 6. However, a show cause notice dated 06.09.2019 was issued to the appellant proposing the deny credit on following allegations: (i) The credit of Rs. 12,13,159/- was wrongly taken on Go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... butor means an office of the manufacturer or producer of final products or provider of output service, which receives invoices issued under rule 4A of the Service Tax Rules, 1994 towards purchases of input services and issues invoice, bill or, as the case may be, challan for the purposes of distributing the credit of service tax paid on the said services to such manufacturer or producer or provider, as the case may be; Rule 7 . Manner of distribution of credit by input service distributor .- The input service distributor may distribute the CENVAT credit in respect of the service tax paid on the input service to its manufacturing units or units providing output service, subject to the following conditions, namely:- (a) ****** (b) ****** (c) ****** (d ) credit of service tax attributable to service used by more than one unit shall be distributed pro rata on the basis of the turnover of such units during the relevant period to the total turnover of all its units, which are operational in the current year, during the said relevant period; Explanation 1 .- For the purposes of this rule, unit includes the premises of a provider of output service and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 on the goods manufactured for the input service distributor or a manufacturer who manufactures goods, for the input service distributor under a contract, bearing the brand name of such input service distributor and is liable to pay duty on the value determined under section 4A of the Excise Act. 14. The only issue that arises for consideration in this appeal is as to whether the appellant was entitled to take CENVAT credit prior to 01.04.2016 since credit for the period w.e.f. 01.04.2016 has been granted by the Commissioner (Appeals). 15. The submission that was advanced on behalf of the appellant before the Larger Bench was that rule 7 of CENVAT Rules allowed distribution of credit even prior for the period to 01.04.2016 and, in any case, substitution of rule 7 of the CENVAT Rules would have retrospective application. After noticing the provisions of the CENVAT Rules and the Authorization submitted by Parle, which was accepted by the appellant, the Larger Bench observed: 25. The office of Parle at Bahadurgarh is registered as a input service distributor under rule 2(m) of the CENV ..... X X X X Extracts X X X X X X X X Extracts X X X X
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