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TMI Blog2023 (6) TMI 554X X X X Extracts X X X X X X X X Extracts X X X X ..... e Cenvat credit in its books during the period October, 2009 to March, 2014 at the Pune Unit only which was objected to by the department and it was the specific case of the department that the assessee should have distributed the tax credit to the various units situated across the country and should not have availed Cenvat Credit at Pune Unit only. In that decision the Hon ble High Court after considering Rule 7 ibid as it was existing both pre and post amendment in 2012 held that the assessee was entitled to utilize the Cenvat credit at its one unit only i.e. Pune unit. The Hon ble High Court also gone into the issue of revenue neutrality in that matter. The opening words of Rule 7 is may distribute and therefore the assessee is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2019 - FINAL ORDER No : A/85932/2023 - Dated:- 13-6-2023 - HON BLE MR. AJAY SHARMA , MEMBER ( JUDICIAL ) Ms. Shrayshree T. , Advocate for the appellant Shri P. K. Acharya , Superintendent ( AR ) for the respondent ORDER Per : AJAY SHARMA This appeal has been filed from the impugned Order dated 31.12.2018 passed by the Commissioner of GST Central Excise (Appeals), Nashik rejecting the appeal filed by the appellant. 2. The issue involved herein is whether the Appellant is entitled to the Cenvat Credit attributable to common input service utilized in its Die Lube Unit as per the provision of Rule 7 of Cenvat Credit Rules, 2004? 3. The appellant is engaged in manufacturing of excisable goods viz. Silicon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nly excisable goods were manufactured and not exempted goods and the invoices pertaining to the input service consumed in the said unit were also in the name of the appellant and therefore the availment of Cenvat credit on the said invoices cannot be faulted. He also submits that the appellant is the head office of the company, which is not an Input Service Distributor (ISD) registrant and is availing and utilizing the Cenvat credit of services availed at other units and not distributing the same. According to learned counsel even if they did not have a registration as an ISD, the availment of Cenvat credit cannot be denied. As an alternative submission learned counsel submits that the present case is governed by revenue neutrality inasmuch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n ble High Court also gone into the issue of revenue neutrality in that matter. The relevant paragraphs of the said decision are extracted as under:- xxx xxx xxx 8. It would be appropriate that we reproduce Rule 7 as existing prior to 2012 and post 2012 which is as under:- Rule 7 as Existing Prior to 2012 :- 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 condition, namely : (a)The credit distributed against a document referred to in Rule 9 does not exceed the amount of service tax paid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing units which are providing output services. This is evident from the use of word may distribute the Cenvat credit is found in Rule 7 both prior and also post 2012. Thus, from the reading of the Rules, the option was available to the assessee whether to distribute the Cenvat credit or not. In fact, our attention is invited to Rule 7 of the Cenvat Credit Rules, 2004 as substituted w.e.f. 1-4-2016 which has made it mandatory for distribution of input services to the various units providing output services. This is evidence by the use of words shall distribute the Cenvat credit in the substituted Rule 7 as Cenvat Credit Rules 2004 w.e.f. 1-4- 2016. Therefore, on plain reading of Rule 7 as existing both pre and post amendment 2012 coverin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndatory for the assessee to distribute the credits between the units. My aforesaid view finds support from the decision of a co-ordinate Bench of the Tribunal in the matter of Gloster Cables Ltd. Unit I vs. Commr. Central Tax, Medchal Commissionarte; 2018 (5) TMI 660- CESTAT Hyderabad. Otherwise also it is no doubt true that the entire excise would be revenue neutral as the utilization by any unit of the same entity would not make any loss to the exchequer as the credit disallowed from one unit in proportion to second unit will be eligible as credit to such other unit and the net credit availment and utilization form a company s perspective will remain unchanged and also that the appellant is not going to gain anything extra to its entitlem ..... X X X X Extracts X X X X X X X X Extracts X X X X
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