9911796707
TMI Blog2024 (8) TMI 151X X X X Extracts X X X X X X X X Extracts X X X X ..... rs (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. Further the legal necessity that input services should be for use in or in relation to the manufacture of final products did not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on to challenge credit wrongly availed is at the ISD's end. The demand of Penalty is not sustainable as the Appellants have not violated Rule 15(3) of the CENVAT Credit Rules, 2004 and thereby, the demand of interest is also not sustainable. Hence, the impugned order deserves to be set aside. 3.2 The learned Authorized Representative for the department has taken us through the OIO. He referred to the judgment of a Coordinate Bench of this Tribunal in Clariant Chemicals (I) Ltd vs Raigad [2015-TIOL-2510-CESTAT-MUM] to state that action to examine the validity of the credit taken has to be done by the jurisdictional officer at the recipients end. He stated that in the absence of any proof to establish the nexus of input services to the units ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ght to be disallowed merely by reason of the fact that service tax in this case was paid under Section 66A and not under Section 66 is concerned, I do find a reference to the above point in the SCN that 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 are taken by the assessee in contravention of the provisions supra. However I do not find the said position taken in the SCN to be correct in view of the clarifications by the Board on the above subject that service tax paid under Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd 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 m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rought in by Notification No. 3/2011 dated 01/03/2011, w.e.f 01/04/2011 to the definition of 'Input service' under Rule 2 (l) of the Cenvat Credit Rules, 2004 substituting the earlier definition and omitting the expression 'activities relating to business'. Prior to the said date the scope of the term 'input' and 'input service' was very broad. On finding that the impugned order does not set out the actual facts for denying the credit, service credit wise or give any cogent reason for the denial and considering the broad scope of the term 'input service' prior to 01/04/2011, without there being a 1:1 corelation with input and output, we are inclined to accept the appellants plea. 8. For the reasons discussed, we find that the appel ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
