M.B. Industries Pvt. Limited Vs Commissioner of Central Goods And Service Tax & Central Excise (CESTAT Delhi)
CESTAT Delhi held that in terms of the provisions of Rule 2(m) and Rule 7 of the CENVAT Rules, before 01.04.2016, the Principal Manufacturer as an Input Service Distributor is facilitated to distribute cenvat credit in respect of service tax paid on the input services to its Contract Manufacturing Unit working on job work basis.
Facts-
The common issues involved in the instant appeals are whether input service credit distributed by M/s Parle Biscuits Pvt. Ltd., the principal manufacturer (PBPL in short) as an Input Service Distributor (ISD) to M/s M. B. Industries Pvt. Ltd., /M/s M. B. Foods Pvt. Ltd., (appellants in short) working on job work basis, known as “Contract Manufacturing Unit” (CMU), is deniable on the ground that CMU is not a manufacturing unit of PBPL and the credit could be distributed by ISD only to its own manufacturing units as per Rule 7 of CCR and whether extended period of limitation and penal provisions are invocable in the absence of any conscious or deliberate suppression of facts or mis-statement on the part of the appellants.
Conclusion-
Larger bench in the case of Krishna Food Products have held that in terms of the provisions of Rule 2(m) and Rule 7 of the CENVAT Rules, before 01.04.2016, the Appellants could distribute CENVAT credit in respect of the service tax paid on inputs services to its manufacturing units, including job workers.
Held that based on the view expressed by the Larger bench on the very same question, we follow the same and allow these appeals and set aside the impugned orders. Accordingly, these appeals are allowed with consequential benefits.
FULL TEXT OF THE CESTAT DELHI ORDER
The issue involved in this batch of appeals is – whether issuance of Input Service Distributor (ISD) invoice by M/s Parle Biscuits Pvt. Limited to its contract manufacturing unit (M/s M.B. Industries Pvt. Ltd.,) is legal and correct when the contract manufacturing is carried in terms of Notification No. 36/2001-CE (NT).
2. The details of appeals are as follows:-
