2013 (4) TMI 329 - AT - Central Excise

Waiver of pre-deposit - Wrong availment of Cenvat Credit - CHA Services, THC and GTA Services - Held that - As regards the Cenvat credit of service tax paid on CHA Services, THC and GTA Services, there are various decisions which indicate that appellant/ assessee is eligible for availing Cenvat credit of the service tax paid by the service providers. As regards the service tax paid on the Export Sales Commission, we find that the Hon ble High Court of Gujarat is against the appellant as held in the case of Cadila Health Care. Since the first appellate authority has dismissed the appeal only for non compliance with the order of pre deposit and without recording any findings on the merits of the case - We direct the appellant to deposit an amount of Rs. 34,000/- within a period of four weeks from today and report compliance before the learned Commissioner (Appeals) - The first appellate authority, on such compliance being shown to him, will take up the appeal for disposal and decide the same on the merits of the case, after affording reasonable opportunity of being heard - Appeal disposed of as indicated hereinabove.

Summary

Issues: Stay petition for waiver of pre-deposit of duty and penalty on ineligible Cenvat credit.

Analysis:
The judgment pertains to a stay petition seeking the waiver of pre-deposit of duty and penalty amounting to Rs. 4,47,808/- each, related to the confirmation of ineligible Cenvat credit. The appellant had claimed credit on service tax paid for various services, including Customs House Agent Services, Terminal Handling Charges, Goods Transport Agency services, and Export Sale Commission.

Upon hearing both parties, the Tribunal observed that the appeal itself could be disposed of at that stage since the first appellate authority had dismissed the appeal solely due to non-compliance with the pre-deposit order. Regarding the eligibility of Cenvat credit on certain services, the Tribunal noted that there were precedents supporting the appellant's right to avail such credit. However, concerning the service tax paid on Export Sales Commission, the Tribunal referred to a judgment by the Hon'ble High Court of Gujarat in the case of Cadila Health Care, which ruled against the appellant.

As a result, the Tribunal directed the appellant to deposit the amount of Rs. 34,000/- representing the service tax credit availed on Export Sales Commission within four weeks. The first appellate authority was instructed to consider the appeal on its merits after the appellant's compliance and provide a reasonable opportunity for a hearing. The appeal was disposed of accordingly, with the Tribunal's decision outlined for implementation.