CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL CHANDIGARH REGIONAL BENCH - COURT NO. I Excise Appeal No. 60195 of 2016 [Arising out of Order-in-Original No. 01-03-MV-CCE-2016 dated 21.04.2016 passed by the Commissioner of Central Excise & Service Tax, Gurgaon-II]

M/s Exide Industries Ltd ……Appellant Plot No. 179, Sector 3 Hside Growth Centre, Bawal, Rewari, Haryana 123501 VERSUS Commissioner of Central Goods & Service ……Respondent Tax, Faridabad, GST Bhawan, New CGO Complex, NH-IV Faridabad, Haryana 121001 APPEARANCE:

Ms. Krati Singh and Ms. Samiksha Uniyal, Advocates for the Appellant Mr. Siddharth Jaiswal and Mr. Shantanu Kumar Meena, Authorized Representatives for the Respondent CORAM: HON’BLE MR. S. S. GARG, MEMBER (JUDICIAL) HON’BLE MR. P. ANJANI KUMAR, MEMBER (TECHNICAL)

FINAL ORDER NO. 60236/2026 DATE OF HEARING: 12.11.2025 DATE OF DECISION: 09.03.2026 S.S. GARG:

The present appeal is directed against the impugned Order-in-

Original dated 21.04.2016 passed by the Commissioner of Central Excise, Gurgaon, whereby, the learned Commissioner has confirmed the demand of Rs.4,24,11,327 under Rule 14 of the Credit Rules read with Section 11A(1) of the Central Excise Act, 1944 along with interest and also imposed equal penalty under Rule 15 of the Cenvat Credit Rules and Rule 25 of the Central Excise Rules, 2002.

2. Briefly the facts of the present case are that the appellant is engaged in the manufacturing of batteries for automobiles and other products falling under Chapter 86 of the First Schedule to the Central Excise Tariff Act, 1985; it has five regional offices (2 in Kolkata, 1 each in Delhi, Mumbai and Chennai) which are registered as Input Service Distributor ('ISD). Further, there are eight manufacturing units of Exide. One of the manufacturing units of the appellant is situated in Bawal; all five ISDs distribute the credit of service tax availed among the manufacturing units under the cover of invoice and the appellant avails the credit distributed by ISDs. During the audit, it could not be ascertained by the audit that how much amount has been spent by the Headquarters office of the appellant for their Bawal unit. Hence, the audit has observed that in the absence of proper description, the CENVAT Credit on service tax have been disproportionately distributed. On these allegations, various show cause notices were issued proposing to disallow the Cenvat credit for the period from May, 2013 to October, 2015 along with interest and penalty on the ground that the input services of which the credit is distributed to the appellant, are not used by the appellant as the expenses towards these services are not booked in its books of accounts. After following the due process, the adjudicating authority confirmed the demand on the basis that the credit on input services pertaining to more than one unit should be distributed proportionately under Rule 7 of the Cenvat Credit Rules. Aggrieved by the said order, the appellant has filed the present appeal.

3. Heard both the parties and perused the material on record.

4. Learned Counsel for the appellant submits that the impugned order is not sustainable in law and is liable to be set aside as the same has been passed without properly appreciating the facts and the law and binding judicial precedents.

4.1 She further submits that the credit distributed to the appellant is in accordance with Rule 7 of the Credit Rules as prevailing during the relevant period. She further submits that with effect from 01.04.2012, Rule 7 of the Credit Rules provided that ‘ISD may distribute Cenvat credit paid on input services to its manufacturing unit or units providing output service subject to the four conditions provided therein’. She further submits that with effect from 01.04.2016, Rule 7 was substituted to say that ISD shall distribute the Cenvat credit paid on input services to its manufacturing unit or units providing output service or an outsourced manufacturing unit subject to the seven condition