2007 (4) TMI 1 - AT - Central Excise

Service Tax - Pre-deposit - Good transport agent s service - Credit of service tax paid by manufacture on input service,prima-facie, admissible - pre-deposit of service tax credit waived

Summary

Issues involved: Application for dispensing with pre-deposit of confirmed amount and personal penalty; Interpretation of Rule 2(1) of Cenvat Credit Rules, 2004 regarding availing credit for service tax paid on transport of goods.

Analysis:
1. The application sought to dispense with the pre-deposit of a confirmed amount and personal penalty. The demand was confirmed against the applicant for service tax paid on transport of goods from their factory to customer premises. The appellant argued that outward transportation of finished goods falls under the definition of "input service" as per Rule 2(1) of Cenvat Credit Rules, 2004. They cited relevant case law and Tribunal orders supporting their contention.

2. The Revenue contended that only services availed till the clearance of goods from the factory gate constitute input services. They referred to a Tribunal's Stay Order where the appellant's claim for cenvat credit on certain services was not found favorable. The conflicting decisions of various benches were highlighted, and the appellant argued for adopting the interpretation favorable to the assessee, citing a decision of the Hon'ble Kerala High Court.

3. The definition of "input service" from Rule 2(1) of Cenvat Credit Rules, 2004 was analyzed. The Tribunal found that services related to the clearance of final products from the place of removal are included in the definition of input services. The Tribunal agreed with the appellant's argument that outward transportation of finished goods should be considered an input service, as it was not specifically excluded in the definition.

4. The Tribunal referred to a previous decision where the denial of credit for service tax paid on transportation of finished goods was held improper. Based on this decision, unconditional stays were granted to other assessees in similar situations. The appellant's argument that freight charges towards movement of goods were included in the assessable value of final products was also acknowledged.

5. Despite Revenue's reliance on a stay order in a different case, the Tribunal decided to follow previous decisions granting stays in similar circumstances. Ultimately, the Tribunal dispensed with the pre-deposit condition and penalty, allowing the stay petition unconditionally based on the interpretation of the definition of "input service" and relevant case law.

This detailed analysis of the judgment provides a comprehensive understanding of the issues involved and the Tribunal's decision based on the interpretation of relevant legal provisions and precedents.