2012 (8) TMI 859 - AT - Central Excise

Waiver of pre deposit - CENVAT CRedit - Place of removal - CFA service - - Held that - goods manufactured by the appellant were sold through the CFA. It is also not in dispute that the goods were physically conveyed by the appellant to the buyers through the premises of the CFA. If that be the case the CFA s premises would also qualify to be place of removal in terms of Section 4(3) of the Act. However this finding is not enough to give relief to the appellant inasmuch as the definition of input service for the period from 1-4-2008 envisages transportation of goods upto the place of removal. In the instant case CFA service was received by the appellant for supply of the goods from the CFA s premises to the buyers (dealers). On this factual matrix the appellant has not made out prima facie case - Conditional stay granted.

Summary

Issues:
- Applicability of CENVAT credit on clearing & forwarding agent's service
- Interpretation of "place of removal" under the Central Excise Act
- Impact of the definition of "input service" post-amendment

Analysis:
1. Applicability of CENVAT Credit: The appellant sought waiver and stay regarding the denial of CENVAT credit on the clearing & forwarding agent's service (CFA service) and a penalty. The Department contended that the CFA service included transit of goods beyond the factory, making the credit claim invalid under the amended definition of "input service." The appellant argued that the sale of goods occurred beyond the CFA premises, designating it as the place of removal. The tribunal considered both arguments.

2. Interpretation of "Place of Removal": The tribunal examined the definition of "place of removal" under Section 4 of the Central Excise Act. While the appellant relied on this definition to support their claim, the Superintendent (AR) referenced a judgment restricting the application of this definition. The tribunal noted the conflicting interpretations but emphasized the applicability of Rule 2(t) of the CENVAT Credit Rules, which mandates using Act definitions in the absence of specific rule definitions.

3. Impact of Amendment on "Input Service": The tribunal highlighted the 2008 amendment to the definition of "input service," emphasizing the change from "from" to "upto" the place of removal. Despite acknowledging that the CFA's premises could qualify as a place of removal, the tribunal noted that the CFA service involved transporting goods beyond this point, aligning with the amended definition. Consequently, the appellant failed to establish a prima facie case for the credit claim.

4. Financial Hardship and Pre-deposit: The tribunal directed the appellant to pre-deposit a specified amount within six weeks, emphasizing the lack of pleaded financial hardships. Compliance with this directive would lead to a waiver of pre-deposit and a stay on penalty recovery and the remaining CENVAT credit amount, providing a conditional relief to the appellant.

In conclusion, the judgment delves into the nuanced aspects of CENVAT credit eligibility, the interpretation of statutory definitions, and the impact of legislative amendments on tax credit claims. The tribunal's detailed analysis underscores the importance of legal precision and compliance in tax matters, balancing the interests of the appellant with statutory provisions and judicial precedents.