2008 (7) TMI 331 - AT - Service Tax

Credit denied in respect of input services which were provided/received at the Depots - Revenue has considered the factory premises to be the place of removal appellant has proved that the expenses were incurred prior to reaching of the goods at Depot and the payment had been made up to the depot which is place of removal and they are required to be considered as input services - appellants have made out strong case on merits in their favour - stay application is allowed

Summary

Issues:
1. Denial of Cenvat credit for input services provided/received at Depots.
2. Consideration of factory premises as place of removal.
3. Rejection of appellant's plea based on material evidence.

Analysis:
1. The appellant was required to pre-deposit a duty amount and another sum as they were denied Cenvat credit for input services at Depots. The Revenue considered the factory premises as the place of removal, excluding the services from the purview of 'input services'. The appellant presented evidence to the Commissioner (Appeals) showing that expenses were incurred before goods reached the Depot, and payment was made up to the depot, which they argued should be considered as 'input services'. The Tribunal noted the strong case made by the appellants in their favor based on the evidence. Consequently, the Tribunal allowed the stay application, waiving the pre-deposit amount and staying its recovery until the appeal's disposal. No recovery of the amount was to occur even after 180 days from the order's issuance, with the appeal scheduled for hearing in due course.

2. The learned Jt. CDR reiterated the findings of the Commissioner (Appeals), which were challenged by the appellant. The Tribunal carefully considered the evidence presented, emphasizing that expenses were incurred prior to goods reaching the Depot, which was deemed the place of removal. The Tribunal acknowledged the appellant's argument that such expenses should be classified as 'input services', supporting their decision to grant the waiver of pre-deposit and stay recovery until the appeal's resolution.

3. In a detailed analysis, the Tribunal reviewed the material evidence and arguments put forth by both parties. The appellant's submission of a letter and evidence to the Commissioner (Appeals) was crucial in demonstrating that goods were cleared at the depot, with Central Excise duty paid including expenses incurred up to that point. Despite the Revenue's initial denial of Cenvat credit, the Tribunal found merit in the appellant's case based on the evidence provided. As a result, the Tribunal allowed the stay application, providing relief to the appellant by waiving the pre-deposit amount and halting recovery pending the appeal's final adjudication.