2016 (6) TMI 463 - AT - Central Excise

Claim of CENVAT credit of service tax paid on clearing and forwarding charges, subscription to association or clubs and periodicals, inspection and freight charges - Held that - It is not in dispute that the respondent is an exporter/domestic seller of sugar. Therefore, availing of services of C&F agent is nothing uncommon. Similarly, pre-dispatch inspection is conducted to ensure quality. So also freight charges are incurred to make the goods available at seaport/domestic market and buyers. All the three services are integrally connected to export/domestic sales for which the service tax paid thereon claimed as CENVAT credit is allowed. So far as subscription of association/clubs/periodicals is concerned, that does not have any integral connection to manufacture for which no CENVAT credit of the service tax paid thereon is admissible. This is the consistent view of this Bench. - Decided partly in favour of revenue Finding no malafide in respect of the claim of CENVAT credit on subscription of association/club/periods made by appellant, there shall be no penalty.

Summary

Issues:
1. Condonation of delay in filing appeals before the Tribunal.
2. Clarification on the necessity of filing separate appeals for different adjudication orders.
3. Admissibility of CENVAT credit on various services for an exporter/domestic seller of sugar.
4. Eligibility of CENVAT credit for subscription to association/clubs/periodicals.
5. Penalty imposition for the claim of CENVAT credit on subscription to association/clubs/periodicals.

Analysis:

1. The appeal was filed by the Revenue with an application for condonation of delay, as they initially believed that a common order covered multiple adjudication orders. However, it was later clarified that separate appeals were required for different orders. The delay was condoned due to this confusion.

2. The counsel explained that the assessees were different in all four cases mentioned in the appellate order, emphasizing the need for separate appeals for each case to ensure clarity and adherence to legal procedures.

3. The appeals involved the admissibility of CENVAT credit on services such as clearing and forwarding charges, inspection charges, and freight charges for an exporter/domestic seller of sugar. The Tribunal allowed the CENVAT credit on these services as they were integral to the export/domestic sales process.

4. However, the Tribunal held that CENVAT credit for subscription to association/clubs/periodicals was not admissible as it lacked an integral connection to the manufacturing process. This decision was consistent with previous rulings by the Tribunal.

5. Despite partially allowing the Revenue's appeal, the Tribunal found no malafide intent in the appellant's claim for CENVAT credit on subscription to association/clubs/periodicals. Therefore, no penalty was imposed in this regard. The appeals were disposed of accordingly, with both Miscellaneous Applications (CODs) being allowed as well.

This judgment clarified the necessity of separate appeals for different adjudication orders, upheld the admissibility of CENVAT credit on specific services for an exporter/domestic seller of sugar, and distinguished the eligibility of CENVAT credit for subscription to association/clubs/periodicals.