2011 (4) TMI 851 - AT - Central Excise

Waiver of pre-deposit - CENVAT credit denied on cargo handling service as it was taken without any prescribed documents - Assessees submitted that in the light of the CBEC s Circular F.No B 11/1/2002 TRU, dated 01.08.2002, individuals undertaking the activity of loading or unloading of cargo would not be liable to the service tax as cargo handling agency - Held that - Once the activity itself has been held not leviable to service tax and the assessees having paid at the insistence of the department, they are entitled to credit of tax paid by them - Decided in favour of assessee.

Summary

Issues:
1. Waiver of pre-deposit of CENVAT credit and related interest and penalty.
2. Liability of individuals for service tax on cargo handling.
3. Appeal against the extended period of limitation.

Analysis:
1. The judgment addresses the application for the waiver of pre-deposit of CENVAT credit and related amounts. The Hon'ble Vice-President allowed the waiver as the assessees were found entitled to avail CENVAT credit for service tax paid under the category of GTA service for cargo handling. The demand raised by the department was set aside, and the appeal was taken up for final disposal.

2. The learned counsel for the assessees argued that individuals undertaking loading or unloading of cargo are not liable to service tax as a "cargo handling agency" based on CBEC's Circular. The demand on the grounds of cargo handling service was found inadmissible as the activity was not leviable to service tax. As the assessees paid the tax at the department's insistence, they were deemed entitled to credit for the tax paid. Consequently, the demand, interest, and penalty were set aside, covering a specific period. The appeal of the assessees was allowed, while the Revenue's appeal against the extended period of limitation was dismissed.

3. The final result of the judgment was the allowance of Appeal No. ST/41/2011 and the dismissal of Appeal No. E/34/2011. The decision was dictated and pronounced in open court, providing a clear resolution to the issues raised in the case.