2012 (9) TMI 459 - AT - Central Excise

Denial of cenvat credit of courier services - Held that - The first appellate authority has considered the issue on a presumption that the appellants were dispatching the final products to their customers and it is on F.O.R. basis. It is the findings that the appellant also recovered the cost from the courier services for any damages on the way as there is no contract between the customer and courier company. Accordingly, in terms of Board s Circular No.97/8/2007-ST dated 23.08.97 they are eligible for Cenvat Credit of service tax paid on courier services. As the documents indicate that the appellant had utilized the services of courier for sending the samples to their overseas customers for approval to remit the matter back to the adjudicating authority only to verify the factual detail as to whether the credit availed by the appellant of the service tax paid on the courier services is in respect of dispatch of the sample or otherwise - in favour of assessee by way of remand.

Summary

Issues:
1. Waiver of pre-deposit of duty amount, interest, and penalty.
2. Eligibility of cenvat credit on courier services.
3. Evidence submission by the appellant.
4. Interpretation of documents for dispatch of samples.
5. Remitting the matter back to the adjudicating authority.

Analysis:

Issue 1: The appellant filed a stay petition seeking the waiver of pre-deposit of duty amount, interest, and penalty. The amounts in question were confirmed by the adjudicating authority and upheld by the first appellate authority due to the appellant availing cenvat credit of courier services, which were deemed ineligible.

Issue 2: The lower authorities held against the appellant for utilizing courier services for dispatching finished goods and availing cenvat credit. The appellant argued that only samples were dispatched for approval, relating to their glass bottle manufacturing business. The Tribunal noted consistent views allowing credit for services related to sample dispatch.

Issue 3: The appellant's representative contended that the lower authorities wrongly concluded without considering the nature of dispatched items. The Departmental Representative argued the lack of evidence supporting the claim of dispatching only samples.

Issue 4: Upon reviewing documents presented by the appellant's representative, the Tribunal found errors in the first appellate authority's findings. The documents indicated the use of courier services for sending samples to overseas customers for approval, contradicting the presumption of dispatching final products.

Issue 5: The Tribunal determined that if the courier services were used for dispatching samples for customer approval, the appellant was eligible for cenvat credit. Consequently, the matter was remitted back to the adjudicating authority to verify the purpose of availing the service tax credit on courier services, leading to the appeal's allowance and setting aside of the impugned order.