2013 (3) TMI 503 - AT - Central Excise

Cenvat Credit denied on services used for the civil construction work for pollution control equipment, consulting services and , transportation service, clearing and forwarding charges, legal charges etc. - Held that - The applicant has a strong case in view of the definition of inputs as provided under Cenvat Credit Rules, 2004 that the input service means any service used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products from the place of removal, and includes services in respect of the business activity. Pre-deposit of the dues is therefore waived and recovery thereof waived for hearing of the appeal.

Summary

Issues:
- Application for waiver of pre-deposit of duty, interest, and penalty under Cenvat Credit Rules, 2004.

Analysis:
The appellant filed an application seeking waiver of pre-deposit of duty amounting to Rs. 7,34,238, along with interest and penalty. The dispute arose from the denial of credit on various taxable services used for civil construction work for pollution control equipment, consulting services, transportation service, clearing and forwarding charges, legal charges, among others. The appellant contended that as per the definition of input service under the Cenvat Credit Rules, 2004, they were entitled to credit for the service tax paid on taxable services received. The Revenue, however, argued that the services in question were not directly related to the manufacture of the final product, thus justifying the demand raised.

The Tribunal considered the definitions and provisions of the Cenvat Credit Rules, 2004, and analyzed the nature of the services for which credit was denied. It was observed that the applicant's case aligned with the definition of inputs provided under the Rules. The Tribunal noted that the services for which credit was claimed fell within the ambit of input services as defined, despite not being directly involved in the manufacturing process of the final product. Consequently, the Tribunal found merit in the appellant's arguments and decided to waive the pre-deposit of dues, allowing the appeal to proceed without the requirement of immediate payment.

In conclusion, the Tribunal granted the stay petition, thereby allowing the appellant relief from the pre-deposit requirement, considering the interpretation of the Cenvat Credit Rules, 2004, and the nature of the disputed services in relation to the manufacturing activities. The decision highlighted the importance of aligning the application of tax credit provisions with the specific definitions and criteria outlined in the relevant legislation to determine the eligibility of taxpayers for such benefits.