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TMI Blog2024 (9) TMI 767X X X X Extracts X X X X X X X X Extracts X X X X ..... disputed by the appellant-Commissioner. It is only required to determine credit eligible to be utilised by the sole manufacturing facility in proportion to the contribution to the total turnover of the advertised product. The impugned order has not erred in computing the proportion and, indeed, there is no dispute on that score. It is only the remedy that is under dispute. The adjudicating authority has adopted the harshest of the methods without allowing the assessee to seek the most facilitative option. The impugned order is set aside to the extent of recovery determined therein - matter remanded back to the original authority to re-adjudicate the matter after taking into consideration the correctness of the reversal adopted by the appellant-assessee - appeal allowed by way of remand. - HON BLE MR C J MATHEW, MEMBER (TECHNICAL) And HON BLE MR AJAY SHARMA, MEMBER (JUDICIAL) Shri Rajesh Ostwal, Advocate for the assessee-appellant Shri Rajiv Ranjan, Assistat Commissioner (AR) for Revenue ORDER PER : C J MATHEW M/s Godrej Consumer Products Ltd, a manufacturer of popular brands of aerosol based products, is before us with a dispute about repellent, marketed by them as HIT , that, ow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cturers clear the goods after affixing maximum retail price and, upon discharge of duties of central excise leviable under section 3 and in accordance with section 4A of Central Excise Act, 1944, effected shipments to depots of the assessee. The contracted price for reimbursement included the duties so discharged. The assessee, as owner of the brand undertook advertising promotions, and availed credit of tax paid to providers of service. Such credit was taken by the head office of the assessee, as input service distributor (ISD) , and distributed thereafter to the single unit of theirs manufacturing the said product at Goa. 4. According to the appellant, they as owner of the goods and having borne the duty liability, could not be barred from availment of such credit. The first leg of the claim rests on factual circumstances while the other leg was sought to be buttressed by Learned Counsel for appellant with decision of the Tribunal in Colgate Palmolive v. Commissioner of Central Excise [2012 (25) STR 268 (T)] and of the Hon ble High Court of Bombay in Coca Cola India v. Commissioner of Central Excise [2009 (15) STR 657 (Bom)]. This was sought to be further strengthened by concaten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edit Rules, 2004 with effect from 1st April 2011 to validate the demand in the notice for the prior period on the ground that the decision of the Tribunal in re Mercedes Benz India Pvt Ltd should have guided the adjudicating authority all through. The decision cited in the appeal has been disposed off on challenge before the Hon ble High Court of Bombay by remand back to the Tribunal owing to which it no longer is good law; furthermore, the Tribunal, in disposing off the remand, set aside the order of the original authority for further remand back. Per contra, the decision of the Tribunal in Ingersoll Rand Technologies and Services Private Ltd v. Commissioner of Central Excise, Ghaziabad [2022 (8) TMI 877- CESTAT ALLAHABAD], has held that 18. It is clear from the definition of 'exempted services' w.e.f. 1-4-2011 that 'exempted services' included trading. The issue that arises for consideration is whether the Explanation to rule 2(e) is prospective in nature as submitted by the appellant or it merely clarifies that trading activities were always an 'exempted service', as is contended by the department. 19. To understand the scope of 'Explanation', it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spective operation of the statute, the principles enunciated in the case of Martin Lottery Agencies Ltd. (supra) will be considered as the guiding factor for deciding the issue involved in the present case. 5.6 In view of the above discussions, we do not find any infirmity in the findings recorded in the impugned order, holding that amendment to Rule 2(e) by Notification No. 3/2011-C.E.(N.T.) dated 1-3-2011 will have the prospective effect and cannot be applied retrospectively. Thus, we do not find any merits in the appeal filed by the appellant. (emphasis supplied) 21. The same view was expressed by the Tribunal in Lenovo (India) and the relevant paragraph is reproduced below: 7. We find that for the period 1-4-2011, the issue stands decided in the case of Mercedes Benz India Pvt. Ltd. (supra) wherein it was held that trading is not an exempted service prior to 1-4-2011; provisions of Rule 6 requiring reversal of 6% of trading turnover is not applicable. 22. It is, therefore, clear that trading was not an 'exempted service' prior to 1-4-2011. The demand confirmed in the impugned order cannot, therefore, be sustained and is liable to be set aside. The issue agitated by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or not to be constrained by ownership of manufacturing facilities to source advertising services and to take credit thereof for proportionate distribution to every facility that manufactured the advertised goods. These could assume some semblance of relevance only upon perusal of the remaining submissions, viz., that of being brand owner and that discharge of duty liability on maximum retail price , by inclusion in cost incurred by appellant-assessee, renders these to be validly taken by the appellant-assessee. The proposition impressed upon these submissions are two-fold: that appellant-assessee, insofar as contract manufacture is concerned, stands in the place of deemed manufacturer and that credit of tax paid on advertising service is vested in them for utilization without being input service distributor at all. 10. There is an inherent contradiction in the proposition which, if taken at face value for adoption, would have the effect of disembodying the contract manufacturers for a ghostly merger with the factory at Goa. The headquarters of the appellant had taken credit, and rightly so, as input service distributor which was to be spread over all the manufacturing facilities. T ..... 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