2014 (5) TMI 489 - AT - Central Excise

Waiver of pre deposit - CENVAT Credit - GTA Service - Held that - cenvat credit on input services, namely, GTA services, could be eligible only in such cases, where the goods were delivered upto to the place of removal. Prima-facie, we find that the said case is applicable to the facts of the present case. Accordingly, considering that the amount of Rs.13.00 lakhs has already been paid during the course of adjudication by the Applicant, we direct the Applicant to deposit Rs.4.00 lakhs (Rupees four lakhs only) within a period of eight weeks - Conditional stay granted.

Summary

Issues:
- Application for waiver of predeposit of cenvat credit and penalty under Rule 15 (3) of Cenvat Credit Rules, 2004.
- Interpretation of 'input services' under Rule 2 (l) of Cenvat Credit Rules, 2004.
- Applicability of judicial precedents from different High Courts on eligibility of cenvat credit for GTA services.
- Direction for depositing a specific amount and stay of recovery during appeal.

Analysis:
1. The main issue in this case revolves around the application for waiver of predeposit of cenvat credit and penalty imposed under Rule 15 (3) of Cenvat Credit Rules, 2004. The Applicant had availed cenvat credit on services of Goods Transport Agency (GTA) during the disputed period but was denied by the Department citing that the services did not qualify as 'input services' as per Rule 2 (l) of the Rules.

2. The Applicant, represented by a consultant, argued that the denial of cenvat credit was incorrect, relying on a judgment by the Hon'ble High Court of Karnataka in a similar case. It was contended that the services received fell within the definition of 'input services' and thus were admissible for cenvat credit. Additionally, the Applicant had already deposited a partial amount of Rs.13.00 lakhs during the adjudication process.

3. On the contrary, the Revenue's representative referred to a recent judgment by the Hon'ble Calcutta High Court which disagreed with the Karnataka High Court's view, stating that the eligibility for cenvat credit on GTA services was limited to cases where goods were delivered up to the place of removal before a specific date.

4. After hearing both sides and examining the records, the Tribunal noted the conflicting judgments of the High Courts. The Tribunal found the Calcutta High Court's decision more applicable to the present case and directed the Applicant to deposit Rs.4.00 lakhs within eight weeks. Upon compliance, the balance dues would be waived, and the recovery stayed during the appeal process. The stay petition was disposed of accordingly.

This detailed analysis highlights the legal arguments presented, the conflicting judicial precedents, and the Tribunal's decision based on the interpretation of relevant provisions and case laws.