Praj Industries Ltd. vs. Commissioner Of Central Excise, PUNE-III [2014(36) S.T.R. 1273 (Tri.-Mumbai)]
Decision: In the case, the department’s contention was that the Cenvat credit taken on the input service does not qualify as input service for the appellant being a manufacturer of excisable goods. Therefore, the appellant is not entitled to take input service credit. The Hon’ble Mumbai CESTAT, found that in this case, service tax has been paid by the Head Office of the appellant unit, being Input Service Distributor, and the input service distributor is required to pay service tax on all the services availed by the several units of the Input Service Distributor. The provision that Credit of service tax attributable to service used wholly in a unit shall be distributed only to that unit, was inserted only on 17.03.2012. Prior to that, there was no bar on input service distributor to distribute the credit which pertains to one unit to another unit. Therefore the appellant is entitled to take cenvat credit during the impugned period as distributed by their head office.