Case Law Details
Shahi Food Product Vs Commissioner of CGST & Central Excise (CESTAT Delhi)
CESTAT Delhi held that M/s. Parle Biscuits Pvt. Ltd. can distribute credits on input services attributable to the final product on a pro rata basis proportionate to the turnover between the manufacturing plants of Parle and its contract manufacturing units
Facts- The issue involved is to whether input service credit distributed by M/s. Parle Biscuits Pvt. Ltd. to M/s. Shahi Food Product (appellant) can be denied on the ground that credit could be distributed by Parle only to its own manufacturing unit under rule 7 of the CENVAT Credit Rules, 2004 and not to the appellant which is not a manufacturing unit of Parle.
Notably, the appellant is engaged in the manufacture of Poppins and Kismi Toffee exclusively for Parle as a contract manufacturing unit.
Conclusion- Held that Parle was justified in distributing credits on input services attributable to the final product on a pro rata basis proportionate to the turnover between the manufacturing plants of Parle and its contract manufacturing units under rule 7(d) of the CENVAT Rules in view of the decision of the Larger Bench of the Tribunal in M/s. Krishna Food Products vs. the Additional Commissioner of CGST and Central Excise, Indore Commissionerate.
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