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TMI Blog2024 (8) TMI 151X X X X Extracts X X X X X X X X Extracts X X X X ..... een that as per Rule 9 (5) of the Cenvat Credit Rules, 2004, the burden of proof regarding the admissibility of the CENVAT credit shall lie with the manufacturer or provider of output service taking such credit. This would be irrespective of whether the invoice is from an ISD or directly from a manufacturer / service provider. The Hon ble Apex Court too examined a matter pertaining to the availing of credit under Section 70 of the Karnataka VAT Act, 2003, in THE STATE OF KARNATAKA VERSUS M/S ECOM GILL COFFEE TRADING PRIVATE LIMITED [ 2023 (3) TMI 533 - SUPREME COURT] . The Hon ble Court at the cost of repetition, observed and held that unless and until the purchasing dealer discharges the burden cast on him and proves the genuineness of the transaction/ purchase and sale by producing the aforesaid materials, such purchasing dealer shall not be entitled to Input Tax Credit. A Coordinate Bench of this Tribunal in CLARIANT CHEMICALS (I) LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE [ 2015 (10) TMI 2754 - CESTAT MUMBAI] held that it would be seen from the definition that input service distributor is neither a service provider nor a manufacturer but is only an office of the service provide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... impugned order cannot be sustained. The impugned order hence merits to be set aside and is so ordered - Appeal allowed. - SHRI P. DINESHA, MEMBER (JUDICIAL) AND SHRI M. AJIT KUMAR, MEMBER (TECHNICAL) Shri Joseph Prabhakar, Advocate for the Appellant Shri R. Rajaraman, Authorized Representative for the Respondent ORDER These appeals arise out of a common Order in Original No.1 2/2015 dated 12.1.2015 passed by the Commissioner of Central Excise, Chennai (impugned order). 2. Brief facts of the case are that the appellants are manufacturers of Moulded Case Circuit Breakers (MCCB) falling under Chapter Heading 8536 2020 of CETA, 1985. The appellants avail CENVAT credit of duty paid on the inputs and service tax paid on inputs services used in the manufacture of final products. However, it appeared that the service tax paid on the 'Expat cost' under Section 66A of the Finance Act, 1994 under reverse charge mechanism was not covered within the scope of the definition of input service under Rule 2(1) read with Rule 3(1) of the CCR, 2004 and accordingly the total amount of ISD credit involved had been taken by the assessee in contravention of the provisions of the said Rule. Furth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee, it is not possible to extend the CENVAT credit on the impugned inputs services in terms of Rule 7(d) of the CENVAT Credit Rules, 2004 as it stood at the time of the current dispute. He prayed that the appeal may be rejected. 4. We have carefully gone through the appeals and have heard the rival parties. The three main issues for consideration are as under; (i) The Service Tax paid on the 'Expat cost' under Section 66A of the Finance Act, 1994 under reverse charge mechanism is not covered within the scope of the definition of input service under Rule 2(1) read with Rule 3(1) of the CCR, 2004 and accordingly the total amount of ISD credit involved in question as taken by the assessee is in contravention of the CENVAT provisions (Revenue). (ii) It is the responsibility of the jurisdictional officer with whom the ISD has registered to decide the dispute regarding eligibility or otherwise of the service tax credit that the ISD passes on to others (Appellant). (iii) The input services on which credit is availed, should be for use in or in relation to the manufacture of final products has not been satisfied in this case (Revenue). 5. The issue relating to taking credit of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition, observed and held that unless and until the purchasing dealer discharges the burden cast on him and proves the genuineness of the transaction/ purchase and sale by producing the aforesaid materials, such purchasing dealer shall not be entitled to Input Tax Credit. A Coordinate Bench of this Tribunal in Clariant Chemicals (I) Ltd vs Raigad [2015-TIOL-2510-CESTAT-MUM] held that it would be seen from the definition that input service distributor is neither a service provider nor a manufacturer but is only an office of the service provider or manufacturer. Since input service distributor neither manufactures the goods nor provides the service, there is no question of input service distributor liable to pay any excise duty or service tax. Since the ISD is responsible to ensure that only eligible credit is distributed as per the conditions mentioned in the Rules, he has not 'availed' of any credit for the same to be reversed or denied. It is the duty of the recipient to take only eligible credit and thereby of the jurisdictional officer of the recipient assessee to verify the credit taken and take suitable action thereon, if necessary. As per the discussions the plea of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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