2013 (11) TMI 1169 - AT - Central Excise

Eligibility for Cenvat credit - Service Tax paid on Goods Transport Services Period of Limitation - Waiver of Pre-deposit - Whether during the period from June, 2006 to December, 2009 and from Feb. 2010 to Dec.2010, the appellants were eligible for cenvat credit of service tax paid on GTA services availed for transportation of the finished goods from the factory to the customer s premises Held that - Relying upon ABB Ltd. Vs. Commissioner 2009 (5) TMI 48 - CESTAT, BANGALORE - only normal limitation period would be available and only the cenvat credit demand would be within time - the appellant s plea that their sales were on FOR destination basis is not acceptable, as the conditions as prescribed in the Board s Circular dated 23.08.2007 have not been satisfied. There is nothing in the appellant s contracts with their customer from which it can be inferred that during the transit, the risk of the damage to the goods or loss of the goods was of the appellant and that the outward freight was integral part of the assessable on which excise duty had been paid - during the period from 1.4.2008, Rule 2 (l) of the Cenvat Credit Rules, 2004 had been amended and as such, there was no ambiguity for this period, that cenvat credit in respect of the outward freight from the factory upto to the customer s premises would be available only if the customer s premises is the place of removal - this is not case for total waiver appellant are directed to deposit an amount of Rupees One Lakh as deposit Partial stay granted.

Summary

Issues:
- Eligibility for cenvat credit of service tax paid on GTA services for transportation of finished goods
- Availability of cenvat credit for the disputed periods
- Application of extended period for demand of cenvat credit
- Requirement of pre-deposit for stay applications

Eligibility for Cenvat Credit of Service Tax Paid on GTA Services:
The case involved a dispute regarding the eligibility of manufacturers of Asbestos Cement Pressure Pipes to claim cenvat credit of service tax paid on GTA services for transporting finished goods to customer premises. The appellants contended that they were eligible for the credit, particularly emphasizing the sales being on FOR destination basis. The appellant's counsel cited legal precedents and argued for the waiver of pre-deposit for the appeal.

Availability of Cenvat Credit for the Disputed Periods:
The dispute covered two periods, from June 2006 to December 2009 and from February 2010 to December 2010, with contested cenvat credit amounts totaling Rs.6,35,620 and Rs.1,46,401 respectively. The Commissioner had confirmed the cenvat credit demands along with penalties. The appellant argued that the demand for the period before April 2008 should not apply due to conflicting tribunal judgments and amendments to the Cenvat Credit Rules in 2008.

Application of Extended Period for Demand of Cenvat Credit:
Regarding the period before April 2008, the appellant relied on conflicting tribunal decisions and a judgment of the Hon'ble Gujarat High Court to contest the extended period for the demand of cenvat credit. The appellant sought relief from the extended period based on the ambiguity in tribunal decisions during the disputed period.

Requirement of Pre-Deposit for Stay Applications:
During the hearing of stay applications, the appellant had paid the disputed amount of cenvat credit of Rs.1,46,401, leading to the waiver of pre-deposit for interest and penalty. However, for the other appeal, the appellant was directed to deposit Rs.1,00,000 within a specified period to proceed with the appeal, with the pre-deposit requirement for the remaining amount of cenvat credit demand, interest, and penalty being waived upon compliance.

In conclusion, the judgment addressed the issues of cenvat credit eligibility, disputed periods, application of extended demand periods, and pre-deposit requirements for stay applications, providing detailed reasoning and directives based on the arguments presented by both parties.