2013 (4) TMI 647 - AT - Central Excise

Cenvat credit of service tax paid Waiver of pre-deposit & stay of duty/interest/penalty - credit has been denied to appellant in respect of services like port service, storage and warehousing service, cargo handling service, CHA service, export freight charges and outward courier charges on the ground that these services have been rendered after the place of removal . Held that - The present case are already held by the Hon ble Gujarat High Court in Customs vs. Mundra Port & Special Economic Zone Ltd. 2010 (5) TMI 483 - GUJARAT HIGH COURT has held that credit in respect of these services cannot be denied to the assessee. Following the decision of the stay petition is allowed and pre-deposit is waived and stay of recovery of dues is ordered till the disposal of the appeal.

Summary

Issues:
Waiver of pre-deposit and stay of recovery of duty regarding denied service tax credit for specific services post 'place of removal' amendment.

Analysis:
The appellant sought waiver of pre-deposit and stay of recovery of duty amounting to Rs.3,99,502/-, along with interest and penalty, which were confirmed by lower authorities. The denial of credit for services such as port service, storage and warehousing service, cargo handling service, CHA service, export freight charges, and outward courier charges was based on the premise that these services were rendered after the 'place of removal'. The appellant argued that since the expenses for these services were added to the FOB value of the exported goods, they should be eligible for service tax credit under the CENVAT Credit Rules. Reference was made to a judgment by the Gujarat High Court in the case of Commissioner of Central Excise & Customs vs. Mundra Port & Special Economic Zone Ltd., where it was held that credit for these services cannot be denied to the assessee.

The Revenue, represented by the Deputy Commissioner, contended that the show cause notice was issued before the amendment of the 'place of removal' for denying service tax credit for the period 2006-2007 onwards. Therefore, the adjudicating authority was justified in confirming the demand and denying credit for the mentioned services. However, the Tribunal noted that the services in question had already been deemed eligible for CENVAT credit by the Gujarat High Court in a previous case, where the CESTAT order was upheld. Relying on the decision of the Gujarat High Court, the Tribunal allowed the stay petition, waived the pre-deposit, and ordered a stay on the recovery of dues until the appeal was disposed of.

In conclusion, the Tribunal, following the precedent set by the Gujarat High Court, granted the waiver of pre-deposit and stay of recovery of duty regarding the denied service tax credit for specific services rendered post the 'place of removal' amendment. The decision was based on the established eligibility of these services for CENVAT credit as determined by the Gujarat High Court in a previous case, reinforcing the appellant's entitlement to the credit in question.