2026-VIL-1157-GUJ-CE
  1. Home
  2. 2026-VIL-1157-GUJ-CE

CENTRAL EXCISE High Court Cases

Central Excise - CENVAT credit of service tax distributed by Input Service Distributors for services used at offshore fields - Respondent manufactured excisable products at its processing plant from raw sour gas and condensate received from offshore gas fields through subsea pipelines. The plant manufactured both dutiable and exempted goods. The ISD distributed credit of service tax paid on services used at the offshore fields, where natural gas was produced as an exempted product - Revenue sought to deny the credit on the ground that the services were used exclusively at the offshore fields producing exempted goods - Tribunal allowed the Respondent's appeal by following the decision of the Bombay High Court in the Respondent's own case relating to another plant - Whether the Respondent was eligible to take credit of service tax distributed by the Input Service Distributors on services used exclusively at the offshore fields - HELD - The decision of this Court under the sales tax law concerned the situs of sale under a Production Sharing Contract and had nothing to do with the issue of distribution of input service credit by the Input Service Distributor under the Rules. The word ‘sale’ does not appear anywhere in Rule 7 of the CENVAT Credit Rules, 2004. The Rule is premised on the use of services in or in relation to the manufacture of final products where invoices are received at a place different from the manufacturing facility - Under Rule 7, credit attributable to service used in a unit exclusively engaged in manufacture of exempted goods shall not be distributed. Here the credit was distributed to the plant which manufactures dutiable goods. In the Bombay High Court decision, it was held that the definition of input service is cast in broad terms and covers services used directly or indirectly in or in relation to the manufacture of final products. The dutiable final products are fundamentally premised upon the process which commences at the offshore location - The manufacturer of both dutiable and exempted goods would be required to comply with Rule 6 and is entitled to credit only on that quantity of input service which is used in the manufacture of dutiable goods. The ratio of that decision squarely applies since the only difference is that sour gas, instead of crude oil, was supplied from the offshore field to the plant. Except for that fact, all other aspects are identical. The Tribunal committed no error in applying that decision - The appeals are dismissed
Download File
show more Judgements  

Quick Search

/

Advance Search

GST Resources

/

Gst Rate Finder

Tax Vista

Your Weekly Tax Recap

By Dr. G. Gokul Kishore

Weekly Summary

VIL Video

GST & Customs updates: Sep'26
By CA Vivek Jalan

Create Account

Security-Code
New Code?

Log In

New User ? Forgot Password ?

Forgot Password

Security-Code
New Code?
Please Note: This facility is only for Subscribing Members.

Email this page

Security-Code
New Code?

Feedback this page

Schedule a Demo

Schedule a demo to know the features and advantages of VILGST portal. Get to know the tips to find the desired results in faster way.

Security-Code
New Code?

Caselaw Request Form (CRF)

Didn’t find what you are searching for? No worries, please give us the following details and VIL will email you the desired Caselaws at the earliest:

Security-Code
New Code?