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TMI Blog2024 (10) TMI 1334X X X X Extracts X X X X X X X X Extracts X X X X ..... ly to different units. Therefore, even if the entire credit is distributed to the appellant instead of distribution proportionately to all the units, credit to the appellant unit cannot be denied. It is also found that the other units to whom the proportionate credit should have been distributed have paid much more duty from PLA /cashthan the said attributed credit therefore, this being clearly a revenue neutral situation, the demand is not tenable. In the case of Unifrax India Ltd v CCE [ 2023 (10) TMI 955 - CESTAT AHMEDABAD ], the CESTAT Ahmedabad has held that 'in view of existing provisions of CENVAT Credit Rules, 2004 during relevant period, the 100% credit availed by the appellant is in order in terms of Rule 2007, existing at the relevant time.'. In view of the judgments on the point of distribution of input service credit as well as on revenue neutrality it is settled that even if the cenvat credit is distributed to one unit only during the relevant period, the credit cannot be denied. The impugned order is set aside - Appeal is allowed. - HON BLE MR. RAMESH NAIR ( JUDICIAL ) And HON BLE MR. RAJU , MEMBER ( TECHNICAL ) Sh. J. C. Patel with Sh. Rahul Gajera Advocat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... placed reliance on the following judgments:- CCE v Oerlikon Balzers Coating P. Ltd- 2019 (366) ELT 624 (Bom) Unifrax India Ltd v CCE- 2023 (10) TMI 955-CESTAT-AHD Piramal Glass P. Ltd v CCE 2021 (55) GSTL 22 Hindustan Zinc Ltd v CCE 2019 (370) ELT 1582 Shalimar Paints Ltd v CCE 2022 (8) TMI 469 India Cement Ltd v CCE (2023) 7 Centax 94 3. Shri Rajesh Nathan, Learned Assistant Commissioner (AR) appearing on behalf of the Revenue reiterates the finding of the impugned order. 4. We have carefully considered the submission made by both sides and perused the records. We find that the case of the revenue is that the availment of cenvat credit over and above the proportionate credit attributed to the appellant s unit is not admissible to the appellant as the same could have been distributed to other units. We find that as regard distribution of credit in respect of common input service , the provisions is made under Rule 7 of Cenvat Credit Rules, 2004 which has undergone the change with effect from 01.04.2016. We find that the proportionate distribution of the input service credit was made mandatory by amendment with effect from 01.04.2016. However, prior to the said amendment there was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... found that the records were available for the Revenue to verify the correctness, the Tribunal, in our opinion, rightly did not disentitle the assessee from the entire Cenvat credit availed for payment of duty. Question No.1 therefore shall have to be answered in favour of the respondent and against the assessee. 4.2 The aforesaid decision of the Hon ble High Court was followed by the Hon ble Karnataka High Court in the case of CCE and ST Vs. Hinduja Global Solusions Ltd-2022 (4) TMI 71, the relevant paras of the judgement are extracted below : 8. The dispute involved herein is no more res integra in view of the judgment of the Hon'ble High Court Gujarat in the case Dashion Ltd., supra which has been accepted by the Department in terms of the Circula dated 16.02.2018. The relevant paragraphs of the judgment of Dashion Ltd., supra is quoted hereunder for ready reference: 7. The second objection of the Revenue as noted was with respect of non-registration of the unit as input service distributor. It is true that the Government had framed Rules of 2005 for registration of input service distributors, who would have to make application to the jurisdictional Superintendent of Central ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rds of the assessee, noticed that it was availing the credit of service tax paid for various services by one unit for the purpose of clearance of other unit. After gathering details from the assessee, the adjudicating authority issued show cause notice calling upon the assessee as to why the CENVAT credit of service tax on input service should not be recovered with interest and penalties. In the show cause notice itself, the adjudicating authority had referred to subrule (3) of Rule 15 of the Rules of 2004 as basis for such proposal. Two primary objections of the Department were that the assessee had not registered itself under the Service Tax (Registration of Special Category of Persons), Rules 2005 and that the tax credit from one unit was utilized for discharging tax liability of another unit instead of pro rata distribution amongst different units. The adjudicating authority confirmed the duty demands with interest and penalties. 2.4 Therefore, the points of law examined were that the assessee had utilized credit from one unit for the purpose of duty liability of its other unit without pro rata distribution by the input service distributor and further the assessee had not regis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce, 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 thereon; or (b) credit of service tax attributable to service used in a unit exclusively engaged in manufacture of exempted goods or providing of exempted services shall not be distributed. Rule 7 Post 2012- amendment 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 thereon; or (b) credit of service tax attributable to service used in a unit exclusively engaged in manufacture of exempted goods or providing of exempted services shall not be distributed; (c) credit of service tax attributable to service used wholly in a unit shall be distributed to the unit; and (d) credit of service tax attributable to service used in more than one unit shall be distributed pro rate ..... X X X X Extracts X X X X X X X X Extracts X X X X
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