2013 (6) TMI 467 - AT - Service Tax

Cenvat Credit - input services - fumigation services - Held that - fumigation expenses incurred are in the nature of packing expenses. As packing expenses are allowable and input tax paid on it is allowable under the CENVAT Credit Rules. Input tax paid by the appelalnt for fumigation services is Cenvatable and allowable as input tax. - Decided in favor of assessee.

Summary

Issues:
1. Condonation of delay in filing the appeal.
2. Allowability of CENVAT credit for fumigation services in respect of export containers.

Condonation of Delay:
The judgment addresses a delay of 11 days in filing the appeal, which was allowed for condonation based on the reasons stated in the petition. The Tribunal granted condonation of delay, enabling the appeal to proceed despite the delay in filing.

Allowability of CENVAT Credit for Fumigation Services:
The appellant, a registered dealer under Central Excise and Service Tax, sought CENVAT credit for fumigation services related to packing export containers. The appellant argued that fumigation expenses were akin to packing expenses, which are permitted for credit under the CENVAT Credit Rules. The Service Tax was paid on the fumigation services, but the authority denied the CENVAT credit as input tax.

The Tribunal considered the arguments presented by both parties. The appellant contended that fumigation services were essential for meeting international regulations on packing, making them a legitimate part of packing expenses eligible for CENVAT credit. The Revenue, represented by the Authorized Representative, relied on the Commissioner (Appeals) order, asserting that fumigation expenses did not form part of the final product, thus disallowing input Service Tax.

After evaluating the submissions, the Tribunal concluded that fumigation expenses were indeed part of packing expenses, which are permissible for CENVAT credit under the rules. The Tribunal held that the input tax paid for fumigation services was Cenvatable and should be allowed as input tax. Consequently, the Tribunal directed the allowance of CENVAT credit for input tax paid on fumigation services received by the appellant, deeming it as an input service eligible for credit. The appeal was allowed, and the stay application was disposed of in favor of the appellant.

In summary, the judgment resolved the issue of condonation of delay in filing the appeal and determined the allowability of CENVAT credit for fumigation services concerning export containers, ultimately ruling in favor of the appellant based on the nature of fumigation expenses as part of packing expenses eligible for CENVAT credit.