Archana Wadhwa ORDER
Archana Wadhwa, Member (J)
1. After hearing both the sides and after going through the impugned order, I find that the appellant, who is engaged in the manufacture of Textile Chemicals & Oil has two units that is unit number-III and unit number-II. Both the units were located at separate premises but in the same industrial area at Kanpur and were separately registered under Central Excise. Subsequently, a Centralised Registration of Service Tax for maintaining account was obtained at their head office which was also located at the same premises where Unit Number-III was located. The Unit Number-III availed the Cenvat Credit of Rs. 15,30,258.00/- during the period from July-09 to March-14 on the basis of the invoices issued in the name of head office.
2. Proceedings were initiated against the appellant by way of Show Cause Notice dated 21.07.2014 invoking the longer period of limitation on the ground that a part of the service were also utilised by their unit number-II and as such the credit should have been proportionately distributed between unit number-III and unit number-II. Accordingly, notice proposed denial of Cenvat Credit as also for imposition of penalties.
3. During the course of adjudication the appellant took a categorical stand that both the units belongs to the same asseesse and as such availment of credit by one, whereas a part of the services were used by the other unit has not resulted in any loss to the exchequer. They contended that the credit even according to the Revenue was admissible to unit number-II, who could have utilised the same for payment of duty on their final product. As such they relied upon various decisions of the Tribunal and agitated the matter on merits. The demand was also assailed on the point of limitation.
4. The Original Adjudicating Authority, however, did not find favour with the appellants contentions and confirmed the demand and imposed penalties. On an appeal filed against the said order Commissioner (Appeals) upheld the impugned order. However, appellant authority set aside the demand of around Rs. 84,383.00/- raised and confirmed by denying the Cenvat credit of service tax paid on the outward freight during the period from April 2010 to March 2014. Revenue is not in appeal against the said part of the Commissioner (Appeals) order.
5. As such the only issue, which survives in the present appeal, is as to whether the appellant could have taken the Cenvat credit of service tax paid on the services which were also utilised by their unit number-II. It is a fact that if the appellant was registered as ISD, they could have distributed the credit to any of their units irrespective of the fact as whether the unit has utilized the services or not. Merely because the appellant was not registered as ISD and only obtained the Centralise Registration, cannot result in denial of substantive benefit to the asseessee.
6. An identical issue was considered by the Tribunal in the case of M/s. Dynamic Cables Pvt. Ltd. V/s. CGST & CE, Jaipur, vide Final Order No. 52240/2018 dated 14.06.2018, and reference was made to the Tribunal's decision in the case of Doshion Ltd. V/s. CCE, Ahmedabad-MANU/CS/0335/2012 : 2013 (288) ELT 291 (Tri.-Ahmd.), where in it was held that distribution of the credit without taking registration as input service distributer cannot be held to be as irregular. The said decision stands confirmed by the Hon'ble Gujarat High Court when the appeal filed by the Commissioner was rejected reported as 2015 (323) ELT A76 (SC). As per board's circular number 1063/2/2018-CX : MANU/EXCR/0002/2018 dated 16th of February, 2018, the said decision of the Hon'ble Gujrat High Court stands accepted by the board. In terms of the said decision, it was held that the substantial benefits cannot be denied because of proced........