2010 (2) TMI 363 - AT - Service Tax

Stay-Cenvat Credit- whether the assessee can avail the credit on the service tax paid in respect of the transportation of final products. Held that-the issue was resolved by decision of the Larger Bench, but the said Larger Bench decision has been stayed by the Hon ble High Court of Karnataka in an appeal filed by the Revenue. In view of the conflicting judgments on the issue, appellant has made out a prima facie case for granting waiver of pre-deposit of the amounts involved.

Summary

Issues:
1. Whether the appellant can avail credit on service tax paid for transportation of final products.

Analysis:
The appellant sought waiver of pre-deposit for Service Tax, Education Cess, interest on service tax, and penalty under the Finance Act. Despite the absence of the appellant, a letter requested to decide the stay petition on merits, citing a Tribunal decision. The JDR highlighted the issue of the appellant's eligibility to avail credit on service tax paid for product transportation, echoing the Commissioner's findings.

The Tribunal carefully reviewed the submissions and records. The crux of the matter was the appellant's eligibility to claim service tax credit on outward freight charges for 'Goods Transport Agency' services. While a Larger Bench had resolved the issue, its decision was stayed by the High Court due to a Revenue appeal. Given the conflicting judgments, the Tribunal found a prima facie case for granting waiver of pre-deposit. Consequently, the application for waiver was allowed, and recovery stayed pending appeal disposal.