2014 (4) TMI 137 - AT - Central Excise

Waiver of pre deposit of duty - Denial of benefit of Cenvat credit of service tax paid on GTA services - Denial on the ground that appellants are directly selling their goods to their customers - Held that - there is a Board s circular No. 97/8/2007 ST dated 23.8.07 clarifying that the place of removal refers to depots / premises of the consignment agents or any other place or premises from where excisable goods are sold after their clearance from the factory. If the place of removal refers to the above places, the assessee would be entitled to avail Cenvat credit of service tax paid on the GTA services used for the said purpose - Stay granted.

Issues:
1. Denial of Cenvat credit on service tax paid on GTA services.
2. Dispute regarding the place of removal for availing Cenvat credit.
3. Application for dispensing with the pre-deposit of duty and penalty.

Issue 1: Denial of Cenvat credit on service tax paid on GTA services:
The judgment addresses the denial of Cenvat credit on service tax paid on GTA services received by the appellants for transporting goods from factory gate to depots/consignment agents/dealers. The adjudicating authority had denied the credit, alleging that the appellants were directly selling goods to customers, contrary to the Revenue's own case. However, the Tribunal found that the sales were indeed through depots/consignment agents/dealers, which should entitle the appellants to avail Cenvat credit. The Tribunal referred to a Larger Bench decision in the case of ABB Ltd. and a Board's circular clarifying the place of removal for excisable goods sold after clearance from the factory, supporting the appellants' entitlement to the credit.

Issue 2: Dispute regarding the place of removal for availing Cenvat credit:
The judgment highlights that the dispute regarding the denial of Cenvat credit is covered in favor of the assessee by the Larger Bench decision of the Tribunal in the ABB Ltd. case, confirmed by the Hon'ble Karnataka High Court. Additionally, a Board's circular clarified that the place of removal includes depots/premises of consignment agents or any other place from where excisable goods are sold after clearance from the factory. The judgment also mentions that a show cause notice issued to another unit of the same assessee located at Nagpur was vacated based on the ABB Ltd. decision and the Board's circular, indicating consistency in the interpretation of the issue.

Issue 3: Application for dispensing with the pre-deposit of duty and penalty:
The appellants sought to dispense with the condition of pre-deposit of duty and penalty amounting to Rs.1,68,02,991/- each. The Tribunal, after considering the arguments and precedents, concluded that the appellants were entitled to unconditional stay, implying that they were not required to make the pre-deposit. The decision was based on the findings regarding the denial of Cenvat credit and the favorable legal interpretations and precedents cited in support of the appellants' position.

This judgment from the Appellate Tribunal CESTAT New Delhi provides a detailed analysis of the issues surrounding the denial of Cenvat credit on service tax paid on GTA services, the interpretation of the place of removal for availing Cenvat credit, and the application for dispensing with the pre-deposit of duty and penalty. The judgment emphasizes legal precedents, including the ABB Ltd. case and relevant circulars, to support the appellants' entitlement to the credit and the unconditional stay granted by the Tribunal.

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