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2015 (10) TMI 294 - AT - Service TaxWaiver of pre deposit - whether the GTA service availed for transportation of the goods from the factory to the warehouse/retails outlets and various services availed at the retail outlets would be eligible for cenvat credit - Held that - identical issue was involved in the case of M/s.Cantabil Retail India Ltd. & Ors.(2014 (11) TMI 543 - CESTAT NEW DELHI) and the Tribunal vide stay order observing that it is the warehouse /retail outlet which has to be treated as the place of removal and, therefore, the assessee would be eligible for cenvat credit in respect of the services availed upto the place of removal had ordered unconditional waiver from the requirement of pre-deposit. Though in the appellant s own case for the previous period, the Tribunal vide Stay Order had taken a contrary prima facie view and had ordered pre-deposit, that order was based on the Tribunal s judgement in case of Ultra Tech Cement reported in 2014 (10) TMI 679 - CESTAT NEW DELHI and that judgement have now been set aside by the Hon ble Chattisgarh High Court vide judgement reported in 2014 (8) TMI 788 - CHHATTISGARH HIGH COURT . In view of this, following the Tribunal s judgement in the case of M/s.Cantabil Retail India Ltd. & Ors. (supra), we waive the requirement of pre-deposit of cenvat credit demand, interest and penalty for hearing of the appeal and stay the recovery thereof till the disposal of the appeal. - Stay granted.
Issues:
- Eligibility of cenvat credit for GTA service availed for transportation of goods from factory to warehouse/retail outlets and other services at retail outlets. Analysis: The judgment revolves around the eligibility of cenvat credit for services availed by the appellants, who are manufacturers of readymade garments, including GTA service for transporting goods and various other input services. The dispute primarily concerns whether the services availed for transportation of goods from the factory to the warehouse and retail outlets, along with services at the retail outlets, are eligible for cenvat credit. The Commissioner, in the impugned order, disallowed the cenvat credit for these services, leading to a demand of &8377; 84,83,970/- along with interest and a penalty under Rule 15 of the Cenvat Credit Rules, 2004. The Commissioner's order was based on the premise that the appellant would only be eligible for cenvat credit in respect of services availed up to the 'place of removal,' which was determined to be the factory. Additionally, the Commissioner noted that the various services availed at the retail outlets lacked a nexus with the manufacturing activities. The appellant, represented by Shri Amit Jain, argued for the waiver of pre-deposit and stay of recovery pending the appeal, citing precedents where similar issues were decided in favor of the assessee. Upon hearing both sides, the Tribunal considered the submissions and records. The Tribunal acknowledged that an identical issue had been addressed in a previous case involving M/s. Cantabil Retail India Ltd. & Ors., where it was held that the warehouse/retail outlet should be treated as the 'place of removal,' making the assessee eligible for cenvat credit for services availed up to that point. The Tribunal, therefore, waived the requirement of pre-deposit based on this precedent, allowing the appeal and staying the recovery of cenvat credit demand, interest, and penalty until the appeal's disposal. In conclusion, the Tribunal's decision in this judgment aligns with the precedent set in the case of M/s. Cantabil Retail India Ltd. & Ors., establishing that the warehouse/retail outlet can be considered the 'place of removal' for the purpose of determining eligibility for cenvat credit. The waiver of pre-deposit and stay of recovery granted by the Tribunal in this case reflects a consistent application of legal principles in similar matters, ensuring fairness and adherence to established precedents in tax matters.
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