2018 (5) TMI 673 – CESTAT MUMBAI – TMI – Input service distribution – Recovery u/r 14 of CCR, 2004 – demand on the ground that the input service viz. air travel agent service, is not admissible as the service related to business activity shall exclude on the definition of input service with effect from 1.4.2011 – Held that: – Rule 14 applies to the person who avails credit wrongly which is recoverable – In the present case, the appellant has not availed the credit whereas they have distributed the input service credit to their respective manufacturing unit who, in turn, availed the credit.
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Input service distributor does not fall under Rule 14 of the Cenvat Credit Rules as they neither avail the cenvat credit nor utilize the same for
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the input service distributor as input service distributor does not avail the cenvat credit. They only distribute the input service credit to their manufacturing unit where the credit is availed under Rule 3 of the Cenvat Credit Rules. Therefore, Rule 14 has no application on input service distributor. He placed reliance on the judgment of the Tribunal in the case of Mahindra and Mahindra Ltd. vs. CST, Mumbai – 2017-TIOL-2364-CESTAT-MUM. 3. Shri Vivek Dwivedi, learned Assistant Commissioner (AR) reiterates the finding of the impugned order. 4. On careful consideration of the submissions made by both the sides and perusal of the records, I find that the demand was raised from the input service distributor who has distributed the service cred
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cenvat credit nor utilize the same for payment of any service tax/excise duty. Therefore, the denial of cenvat credit and recovery thereof under Rule 14 against the input service distributor is without authority of law. On this count itself, the demand is not sustainable. This issue has been considered by the Division Bench of this Tribunal in the case of Mahindra and Mahindra Ltd. (supra) wherein the Bench has taken a view that input service distributor has only distributed the input service credit. Rule 14 of the Cenvat Credit Rules can be made applicable only on the person who avails the cenvat credit wrongly or utilizes the same. Show cause notice cannot be issued to the appellant who is an input service distributor for recovery of cen
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