2011 (11) TMI 161 - AT - Central Excise

CENVAT Credit of Service Tax paid on courier services Held that - In this case, the courier service has been used for sending samples to the customers and for sending official documents/correspondence with the Head Office. On receiving the samples and sending the same to the customers, he places orders. Therefore, it is definitely an activity relatable to manufacture. Further, the correspondence from factory to Head Office is also relatable to manufacture and clearance. Mumbai High Court in case of Coca Cola India Pvt.Ltd (2009 (8) TMI 50 - BOMBAY HIGH COURT) have taken a view that the credit of Service Tax in respect of input services relatable to manufacture is admissible.

Summary

Issues:
1. Denial of CENVAT Credit on Service Tax paid on courier services.
2. Condonation of delay in filing appeal.
3. Nexus of courier services with manufacture and clearance of goods.
4. Applicability of previous decisions on the case.

Analysis:
1. The appellant's CENVAT Credit on Service Tax paid on courier services was denied, leading to a demand for the credit availed along with interest and penalty. The Commissioner (Appeals) upheld the demand and penalty, citing a delay of 23 days in filing the appeal and questioning the nexus of courier services with manufacturing activities. However, the Tribunal found the delay reasonable considering the medical certificate provided and the essential role of courier services in the manufacturing process.

2. The delay of 23 days in filing the appeal was deemed justifiable by the Tribunal due to the appellant's submission of a medical certificate showing the officer handling the work was undergoing treatment. The Tribunal criticized the Commissioner (Appeals) for not considering the medical certificate and rejecting the appeal solely on the grounds of delay without delving into the merits of the case.

3. The Tribunal highlighted the critical role of courier services in the manufacturing process, emphasizing that sending samples to customers and corresponding with the Head Office are activities directly related to manufacturing and clearance of goods. The Tribunal disagreed with the Commissioner (Appeals) who failed to recognize the relevance of courier services in facilitating manufacturing activities, contrary to decisions from the Hon'ble Mumbai High Court and Hon'ble Karnataka High Court.

4. Relying on previous decisions, including the case of Coca Cola India Pvt. Ltd. and CCE Guntur Vs CCL Products (India) Ltd., the Tribunal concluded that the appellant was entitled to the CENVAT Credit on courier services. The Tribunal allowed the appeal, providing consequential relief to the appellant based on the precedents and the essential role of courier services in the manufacturing and clearance process.