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2012 (12) TMI 791 - AT - Service TaxDenial of Cenvat Credit - seeking waiver of pre-deposit, Interest and Penalty - Custom House Agents service, Telephone service, Insurance service and repairs and maintenance of factory and vehicles services - Held that - Cenvat credit in respect of Custom House Agents service was in connection with the export of goods from the port as held in the case of Rolex Rings Pvt. Ltd (2008 (2) TMI 295 - CESTAT, AHMEDABAD) credit of service tax paid on these services is admissible to the applicant. Service tax paid on telephone and insurance charges in respect of plant and machinery and employees are also covered by the decision of Keltech Engineers vs. CCE 2008 (1) TMI 96 - CESTAT BANGALORE . Insurance charges in respect of goods in transit - This service is availed by the applicant after removal of the goods from the factory to their buyers and it is not covered in the definition of the input service under the Cenvat Credit Rules. Therefore, applicant is directed to make pre-deposit of ₹ 15,000/- within four weeks and report compliance on 12/10/2012.
Issues: Application for waiver of pre-deposit and stay of recovery of duty, interest, and penalty; Denial of Cenvat Credit for various services availed by the applicant from April 2007 to Feb 2011.
Analysis: 1. The applicant sought waiver of pre-deposit and stay of recovery of duty, interest, and penalty amounting to Rs. 2,88,811 imposed by the lower authority. The issue revolved around the denial of Cenvat Credit for services such as Custom House Agents service, Telephone service, Insurance service, and repairs and maintenance of factory and vehicles services availed during the mentioned period. The original authority confirmed the demand, which was upheld by the Commissioner (Appeals). 2. The advocate for the applicant argued that the service tax paid on Custom House Agents service should be allowed as it was related to the export of goods, citing precedents supporting the admissibility of such credits. Regarding telephone services, the advocate contended that both mobile and landline charges should be creditable if used for business purposes, referencing relevant tribunal decisions. Similarly, the advocate argued for the admissibility of insurance charges and repairs and maintenance of vehicles based on the definition of input service under the Cenvat Credit Rules. Additionally, the advocate claimed that the demand was time-barred as the show-cause notice was issued beyond the limitation period. 3. The Revenue's representative contended that the services availed lacked a nexus with the manufacturing of the final product, thus making them ineligible for Cenvat Credit as per the rules. The services were deemed unrelated to the manufacturing activity, leading to the denial of the credit. 4. Upon deliberation, the Tribunal found that the Cenvat credit for Custom House Agents service was admissible since it was linked to the export of goods, aligning with previous tribunal decisions. Similarly, the service tax paid on telephone and insurance charges related to plant, machinery, and employees was deemed creditable based on cited precedents. However, the insurance charges for goods in transit were excluded from the definition of input service, making them ineligible for credit. The applicant was directed to make a pre-deposit of Rs. 15,000 within four weeks, with a stay on the recovery of the remaining amount until the appeal's disposal.
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