2009 (4) TMI 497 - AT - Service Tax

Waiver of pre-deposit - Cenvat credit - Circular Letter F. No. B-154/06-TRU, dated 19-4-2006 - it has been clarified that the service tax paid under Section 66A is available as input credit under Cenvat Credit Rules, 2004 provided the said services are used as input services by the manufacturer or producer of final products or a provider of output taxable service - In any event, tax paid on the overseas commission is related with the goods manufactured by the applicants and, therefore, prima facie, it appears that the applicants are eligible to avail credit - Stay application is allowed

Summary

The Appellate Tribunal CESTAT, New Delhi allowed the waiver of pre-deposit of duty and penalty for the applicants. The Commissioner (Appeals) found that the applicants availed credit on service tax paid to an overseas commission agent, which was not considered an input service initially. However, a later circular clarified that such service tax could be considered as input credit under Cenvat Credit Rules, 2004. The Tribunal agreed that the tax paid on the overseas commission could be related to the goods manufactured by the applicants, making them eligible to avail credit. Pre-deposit of duty and penalty was waived until the appeal was disposed of.