2010 (2) TMI 367 - AT - Service Tax

GTA service- Cenvat Credit- The issue involved in this case is regarding confirmation of demand of reversal of Cenvat credit availed by the applicant on the service tax paid on input services like GTA Services. The adjudicating authority after considering the submissions made by the applicant before him came to the conclusion that the appellant being a manufacturer/producer of iron ore, which is exempted from payment of duty, is not eligible to avail Cenvat credit on the input services as per the provisions of Rule 6(1) of Cenvat Credit Rules. Held that- in the light of the decision of Repro India Ltd. v. UOI 2009 -TMI - 33282 - BOMBAY HIGH COURT, covers the issue in favour of the appellant. Thus, the appellant has made out a prima facie case for the waiver of pre-deposit of the amounts adjudged by the adjudicating authority. Hence the stay application filed by the appellant is allowed and recovery of the amounts is stayed till the disposal of the appeal.

Summary

Issues involved:
1. Confirmation of demand of reversal of Cenvat credit availed by the appellant on input services like GTA Services.

Analysis:
The issue in this case revolves around the confirmation of demand for the reversal of Cenvat credit on input services, specifically GTA Services. The adjudicating authority concluded that the appellant, engaged in manufacturing iron ore exempted from duty payment, was ineligible to avail Cenvat credit under Rule 6(1) of the Cenvat Credit Rules. The appellant, represented by counsel, argued that the adjudicating authority overlooked relevant case laws. They cited precedents such as the decision of the Delhi Bench of the Tribunal in CCE Delhi v. Punjab Stainless Steel and the judgment of the Bombay High Court in Repro India Ltd. v. UOI. Additionally, reliance was placed on Stay Order Nos. 1478 to 1480/2009 in the case of M/s. MSPL Ltd. v. CCE, Belgaum, involving a similar scenario.

The Departmental Representative contended that the appellant had availed Cenvat credit with the intention of claiming a refund, knowing that their manufactured goods were duty-exempt. It was argued that the appellant should be subject to certain conditions. After considering the arguments from both sides, the Tribunal noted that the appellant was engaged in producing and exporting iron ore. The Tribunal also acknowledged that the decision of the Bombay High Court in Repro India Ltd. v. UOI was available to the adjudicating authority. The Tribunal found that this decision prima facie favored the appellant's position. Consequently, the Tribunal held that the appellant had established a prima facie case for the waiver of the pre-deposit amounts determined by the adjudicating authority. As a result, the stay application filed by the appellant was granted, and the recovery of the amounts in question was stayed pending the appeal's disposal.