2010 (2) TMI 702 - AT - Service Tax

Demand - Cenvat credit - balance sheet also discloses capital assets of more than 15 Crores, raw materials worth more than 2 Crores, finished goods of more than 8 Crores - Taking into consideration all the facts on record, including the financial hardship which may cause, as also the revenue interest, we are of the considered opinion that this is not a fit case to grant total waiver of the amount demanded under the impugned order - Decided against the assessee

Summary

Issues:
1. Denial of credit on Service tax paid on outward transportation.
2. Failure to produce evidence regarding actual supply of goods on FOR basis.
3. Financial difficulties faced by the appellants.

Analysis:
1. The appellants contended that the denial of credit on Service tax paid on outward transportation was erroneous, citing a decision by the Larger Bench. The Commissioner (Appeals) found a lack of evidence regarding actual supply of goods on FOR basis, insurance cover, and freight as part of excisable goods' value. The Tribunal noted the appellants' failure to provide cogent evidence, leading to the denial of credit.

2. The appellants argued that invoices and purchase orders demonstrated supply on FOR destination basis, suggesting further evidence could be produced if required. However, the Tribunal emphasized the need for conclusive proof of actual supply, stating that a mere agreement was insufficient. The Tribunal found the material on record insufficient to grant a stay of the impugned order.

3. The appellants raised concerns about financial difficulties, presenting a balance sheet showing accumulated losses and current assets. Despite acknowledging the financial hardship, the Tribunal decided against a total waiver of the demanded amount. However, the Tribunal granted a stay on the penalty amount but required the balance amount to be deposited within eight weeks.

In conclusion, the Tribunal upheld the denial of credit due to insufficient evidence of actual supply on FOR basis. While considering the appellants' financial challenges, the Tribunal granted a stay on the penalty amount but mandated the deposit of the balance within a specified timeframe.