2011 (8) TMI 367 - AT - Service Tax

Eligibility for CENVAT Credit - Input services provider - courier services or CHA services - In view of the decisions of Tata Steel Ltd. Vs. CCE Mumbai (2010 -TMI - 204582 - CESTAT, MUMBAI), and CCE Vapi Vs. Apar Industries Ltd. (2010 -TMI - 203341 - CESTAT, AHMEDABAD) and CCE Nagpur Vs. Ultratech Cement Ltd. (2010 -TMI - 78203 - BOMBAY HIGH COURT), benefit of credit allowed.

Summary

Issues:
- Eligibility of CENVAT Credit for Service Tax paid on courier services and CHA services.
- Applicability of precedent decisions of the Tribunal.
- Interpretation of the amendment replacing "from the place of removal" with "to the place of removal."

Analysis:
1. Eligibility of CENVAT Credit: The appeal concerns the eligibility of the respondents for CENVAT Credit of Service Tax paid on courier services and CHA services. The Revenue contended that the credit is not admissible as it pertains to activities beyond the place of removal. However, the Tribunal referred to precedent decisions to support the admissibility of credit for both CHA services and Courier services. Specifically, in the case of Tata Steel Ltd. Vs. CCE Mumbai and CCE Vapi Vs. Apar Industries Ltd., it was held that credit for CHA services and Courier services is admissible, respectively. The Tribunal emphasized that the appeal filed by the Revenue lacks merit in this regard.

2. Applicability of Precedent Decisions: The Revenue argued against the admissibility of credit by highlighting a Larger Bench decision in the case of GTC Industries Ltd., which was distinguished as relating to outdoor catering services. However, the Tribunal held that the decisions regarding CHA and Courier services are covered by precedent decisions of the Tribunal, making the appeal against the Larger Bench decision irrelevant. The Tribunal emphasized that in the absence of a stay, the decisions of the Tribunal are binding, irrespective of pending appeals.

3. Interpretation of the Amendment: The Revenue also raised the issue of interpreting an amendment that replaced "from the place of removal" with "to the place of removal," suggesting a retrospective effect that would restrict credit only up to the place of removal. In response, the Tribunal cited the case of CCE Nagpur Vs. Ultratech Cement Ltd., where the Hon'ble High Court of Mumbai clarified that the definition of input services allows for credit related to business activities, regardless of the place of removal. Consequently, the Tribunal rejected the Revenue's argument based on the interpretation of the amendment.

In conclusion, the Tribunal, led by Mr. B.S.V. Murthy, dismissed the appeal filed by the Revenue, affirming the eligibility of the respondents for CENVAT Credit on courier services and CHA services based on established precedent decisions and the interpretation of relevant legal provisions.