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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 ..... the CENVAT Credit Rules, 2004 [the CENVAT Rules] and not to the appellant which is not a manufacturing unit of Parle. 2. The Commissioner (Appeals), by order dated 25.03.2019, held that the appellant would be eligible for taking CENVAT credit w.e.f. 01.04.2016 in view of the amendment made in rule 7 on 01.04.2016 but has denied CENVAT credit to the appellant for the period prior to 01.04.2016 from April 2013 to 31.03.2016. The said order passed by the Commissioner (Appeals), to the extent that it is denied CENVAT credit for the period prior to 01.04.2016, has been assailed in this appeal. 3. The appellant is engaged in the manufacture of Poppins and Kismi Toffee [the products] exclusively for Parle as a contract manufacturing unit. The au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Date: 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner (Appeal) that has been assailed in the present appeal. 9. Shri J.M. Sharma, learned consultant for the appellant submitted that Parle was justified in distributing credits on input services attributable to the final product on a pro rata basis proportionate to the turnover between the manufacturing plants of Parle and its contract manufacturing units under rule 7(d) of the CENVAT Rules in view of the decision of the Larger Bench of the Tribunal in M/s. Krishna Food Products vs. the Additional Commissioner of CGST and Central Excise, Indore Commissionerate [Excise Appeal No. 52692 of 2019 decided on 25.05.2021]. 10. Shri Rakesh Agarwal learned authorized representative appearing for the Department, however, supported the impug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant 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 premises of a manufacturer including the factory, whether registered or otherwise." AFTER 1.04.2016 Rule 2(m) "input service distributor" 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 man ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvice or the premises of a manufacturer including the factory, whether registered or otherwise or the premises of an outsourced manufacturing unit. Explanation 2. ***** Explanation 3. ***** Explanation 4. For the purposes of this rule, "outsourced manufacturing unit" means a job-worker who is liable to pay duty on the value determined under rule 10A 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ttributable to the final product was distributed by Parle on a pro-rata basis proportionate to the turnover of each unit between its own manufacturing plants and its contract manufacturing units, including the appellant, under rule 7 (d) of the CENVAT Rules. 26. What is also important to notice is that rule 7 of the CENVAT Rules allows distribution of credit to its manufacturing units. It does not use the words its own manufactures units. It can, therefore, safely be presumed that the term its manufacturing units should include a contract manufacturer, who manufactures in accordance with the provisions of the Registration Exemption Notification. ***** 42. Thus, even in terms of the provisions of rule 2(m) and rule 7 of the CENVAT Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X
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