Case Law Details
The combined reading of the Rule 7 and the clarificatory Circular dated 23-8-2007 clearly shows that there are only two restrictions regarding the distribution of the credit. The first restriction is that the credit should not exceed the amount of Service Tax paid. The second restriction is that the credit should not be attributable to services used in manufacture of exempted goods or providing of exempted services. There are no other restrictions under the rules. The restrictions sought to be applied by the Department in this case in limiting the distribution of the Service Tax credit made in respect of the Malur Unit on the ground that the services were used in respect of the Cuttack Unit finds no mention in the relevant rules.
As such, restricting the distribution of Service Tax credit in a manner as has been done by the impugned order of the lower appellate authority (original authority had approved of such distribution) cannot be upheld. In case the Department wants to place such restriction as is sought to be placed in the case, the rule is required to be amended. Pre-deposit waived and recovery stayed
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH, MUMBAI
Application No. E/S/1946 to 1948, 1960 & 2020/10
Appeal No. E/1804 to 1806, 1814 & 1893/10
ORDER NO. S/795-799/11/EB/C-II
Arising out of Order-in-Appeal No. SB/76, 76A, B, C, D) MV.2010 Dated: 29.7.2010
Passed by the Commissioner of Central Excise (Appeals), Mumbai
Date of Decision: 24.10.2011
TATA STEEL LTD
Vs
COMMISSIONER OF CENTRAL EXCISE, MUMBAI- I
Judiciary
Per: S S Kang:
Heard both sides.
2. The applicants filed these applications for waiver of pre-deposit of duty, interest and penalty. The demand is confirmed after denying the credit in respect of service tax paid on the input services received by the applicants. The Head Office of the applicants distributed the service tax paid on the input services to the Borivali plant of the applicants. The case of the revenue is that the input services are not in respect of the services used in or in relation to the manufacture of the goods at the Borivali plant. The applicants relied on the decision in Appeal nos. 645 to 647/09 & E/475/10 dated 1.12.10 whereby in applicant’s own case, the Tribunal set aside the demand which was confirmed on the same ground.
3. We find that the Tribunal in the applicant’s own case vide order dated 1.12.2010 held as under:-
“3. The Ld. SDR agrees that this is the issue involved in all these appeals. We find that this issue stands settled by the Tribunal’s order in the case of M/s. Ecof Industries Pvt Ltd., Vs. CCE, Bangalore, holding as follows:-
“The combined reading of the Rule 7 and the clarificatory Circular dated 23-8-2007 clearly shows that there are only two restrictions regarding the distribution of the credit. The first restriction is that the credit should not exceed the amount of Service Tax paid. The second restriction is that the credit should not be attributable to services used in manufacture of exempted goods or providing of exempted services. There are no other restrictions under the rules. The restrictions sought to be applied by the Department in this case in limiting the distribution of the Service Tax credit made in respect of the Malur Unit on the ground that the services were used in respect of the Cuttack Unit finds no mention in the relevant rules. As such, restricting the distribution of Service Tax credit in a manner as has been done by the impugned order of the lower appellate authority (original authority had approved of such distribution) cannot be upheld. In case the Department wants to place such restriction as is sought to be placed in the case, the rule is required to be amended.”
4. Hence, following the ratio of the above cited decision, we waive the requirement of pre-deposit in all the appeals, set aside the impugned orders and allow the appeals.”
4. In view of the earlier order passed in applicants’ own case, the applicants have a strong prima facie case. Therefore, pre-deposit of duty, interest and penalty is waived and recovery thereof stayed during the pendency of the appeals.
5. Stay petitions allowed.
(Pronounced in Court)
