ELDER PHARMACEUTICALS LTD. Vs. COMMISSIONER OF C. EX.

JUDGEMENT

(1.) THE appeal and stay petition are directed against Order -in -Original No. Belapur/64 -65/Bel -I/R -I/Commr/KA/12 -13, dated 31 -12 -2012 passed by the Commissioner of Central Excise, Belapur. The appellant, M/s. Elder Pharmaceuticals Ltd. are manufacturers of pharmaceutical products and they have units in Navi Mumbai, Andheri and also in Uttaranchal and Himachal Pradesh. As far as the units located in Uttaranchal and Himachal Pradesh are concerned, they are eligible for excise duty exemption under area based exempted scheme. The head office of the appellant is situated in Andheri, Mumbai and is registered as an Input Service Distributor (ISD) and distribute credit to all the manufacturing units. In respect of certain specified services listed under sub -rule (5) of Rule 6 of the Cenvat Credit Rules, 2004, the appellant distributed the entire credit to the duty paying units situated outside Uttaranchal and Himachal Pradesh. Revenue was of the view that since the said services are consumed by the units situated in Uttaranchal and Himachal Pradesh, only proportionate credit could be distributed and not the entire credit and accordingly show -cause notices were issued proposing to deny the Cenvat Credit attributable to the services utilised in respect of the units situated in Uttaranchal and Himachal Pradesh. The notices were adjudicated and a total Cenvat Credit of Rs. 3,62,50,930/ - was denied and sought to be recovered under Section 11A of the Central Excise Act along with interest under Section 11AB and also imposing penalty under the provisions of Central Excise Act & Central Excise Rules. Aggrieved of the same, the appellant is before us.

(2.) THE ld. Counsel for the appellant submits that as far as the services specified in sub -rule (5) of Rule 6 is concerned, the Rule itself provided for availing of credit in respect of the certain specified services even though part of such services may be consumed in the manufacture of exempted goods and therefore, so long as the credit is in respect of the services specified in Rule 6(5) of Cenvat Credit Rules, 2004, the appellant can avail the credit thereon and also distribute the same to the duty paying units. It is also the contention of the appellant that though the proposal in the show -cause notice was for denial of Cenvat Credit in respect of the services specified in sub rule (5) of Rule 6, the adjudicating authority has exceeded the jurisdiction by examining the distribution of credit in respect of other services also. The ld. Counsel also submits that the Commissioner having jurisdiction over the recipient of the unit receiving the input service credit does not have jurisdiction to determine the distribution of credit by the head office which is registered as ISD and only the Commissioner having jurisdiction of the head office registered as an ISD is competent to issue notice and decide the matter. Therefore, he assails the impugned order for lack of jurisdiction. He has also relied on a number of decisions of this Tribunal in the case of United Phosphorus Ltd. v. CCE, Surat - : 2013 (30) S.T.R. 509 (Tri. -Ahmd.), Ericson India Pvt. Ltd. v. CCE & ST, Hyderabad -, 2011 (24) S.T.R. 346 (Tri. -Bang.), CCE, Bangalore v. ECOF Industries Pvt. Ltd. - : 2012 (277) E.L.T. 317 (Kar.) : 2013 (29) S.T.R. 107 (Kar.), CST, Ahmedabad v. Godfrey Philips India Ltd. - : 2009 (239) E.L.T. 323 (Tribunal) : 2009 (14) S.T.R. 375 (Tri. -Ahmd.), Eveready Industries India Ltd. v. CCE, Chennai - : 2010 (249) E.L.T. 85 (Tri -Chennai) : 2011 (22) S.T.R. 502 (Tribunal) and H&R Johnson (India) Ltd. v. CCE, Raigad -, 2013 -TIOL -1577 - CESTAT -MUM in support of the above contentions. Accordingly, he pleads for grant of stay.

(3.) WE have carefully considered the submissions made by both the sides.