{"id":250939,"date":"2021-07-08T10:00:32","date_gmt":"2021-07-08T04:30:32","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=250939"},"modified":"2021-07-08T09:38:14","modified_gmt":"2021-07-08T04:08:14","slug":"input-services","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2021\/07\/08\/input-services\/","title":{"rendered":"CESTAT | Whether distribution of credits on input services attributable to final product on a pro-rata basis proportionate to turnover of each unit between manufacturing plants? Tribunal answers"},"content":{"rendered":"<p style=\"text-align: justify;\"><strong>Customs, Excise &amp; Service Tax Appellate Tribunal (CESTAT): <\/strong>The Coram of Dilip Gupta (President) and P V Subba Rao (Technical member) allowed three appeals that sought to assail the order dated 28-06-2019 passed by the Commissioner (Appeals). The appeal filed by M\/s. Krishna Food Products had been dismissed and the demand of CENVAT credit of Rs 75,80,416\/- confirmed by the Adjudicating Authority against Krishna Food had been upheld with interest and penalty. The appeals filed by Parle Biscuits Pvt. Ltd. and Mariamma R. Iyer against the imposition of penalty had also been dismissed.<\/p>\n<p style=\"text-align: justify;\">The appellant claimed to be a contract manufacturing unit engaged in manufacturing biscuits for its principal Parle Biscuits, Iyer was Vice President of Parle Biscuits. Krishna Food claims that it was authorised by Parle Biscuits to manufacture, on its behalf, \u201cbiscuits\u201d and to comply on its behalf all the procedural formalities contemplated under the Central Excise Act, 1944 and the Rules framed thereunder in respect of the goods manufactured on behalf of Parle Biscuits and also to furnish information relating to the price at which Parle Biscuits would sell the said biscuits in order to enable the determination of the value of the said goods under section 4A of the Excise Act.<\/p>\n<p style=\"text-align: justify;\">The final product was cleared on payment of excise duty by Krishna Food on the maximum retail price declared by Parle that is printed on the packages of the biscuits, as is provided under rule 10A of the Central Excise (Valuation) Rules 2000. The excise duty paid by Krishna Food is over and above the amount of CENVAT credit reimbursed by Parle Biscuits.<\/p>\n<p style=\"text-align: justify;\">The issue involved in all these appeals was whether Parle Biscuits was justified in distributing credits on input services attributable to the final product on a pro-rata basis proportionate to the turnover of each unit between the manufacturing plants of Parle Biscuits and its contract manufacturing units, including Krishna Foods, under Rule 7(d) of the CENVAT Rules.<\/p>\n<p style=\"text-align: justify;\">The Tribunal expressed reservations about the proposition of law laid down by the Division Bench in <em>Sunbell Alloys Co. of India Ltd. v. Commissioner of Central Excise &amp; Customs, Belapur<\/em> and also noticed that a Division Bench of the Tribunal in Colgate Palmolive (I) Ltd. v. Commissioner of Central Excise, Mumbai had taken a contrary view.<\/p>\n<p style=\"text-align: justify;\">The Tribunal taking in view the answer given by Larger Bench set aside the order and allowed the appeals.[Krishna Food Products v. Ad. Commr. Of CGST &amp; C.EX, Excise Appeal No. 52692 of 2019, decided on 07-07-2021]<\/p>\n<hr \/>\n<p><span style=\"color: #0000ff;\">Suchita Shukla, Editorial Assistant has reported this brief.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Customs, Excise &amp; Service Tax Appellate Tribunal (CESTAT): The Coram of Dilip Gupta (President) and P V Subba Rao (Technical member) allowed <\/p>\n","protected":false},"author":67011,"featured_media":201689,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3,11],"tags":[31791,6651,44099,29785],"class_list":["post-250939","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-casebriefs","category-tribunals_commissions_regulatorybodies","tag-cenvat","tag-cestat","tag-input-services","tag-law"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.4 (Yoast SEO v27.4) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>CESTAT | Whether distribution of credits on input services attributable to final product on a pro-rata basis proportionate to turnover of each unit between manufacturing plants? 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