2014 (11) TMI 368 - AT - Central Excise

Waiver of pre deposit - Input service credit - courier services - whether appellants are eligible to avail cenvat credit of service tax paid on CHA, Courier services and C&F service - Held that - Following decision of Fenner India Ltd. Vs CST Madurai vide 2014 (7) TMI 355 - CESTAT CHENNAI - applicant has made out a prima facie case for waiver of predeposit of tax along with interest and penalty. Accordingly, the predeposit of tax along with interest and penalty is waived and its recovery is stayed during pendency of the appeal - Stay granted.

Summary

Issues:
Denial of cenvat credit on service tax paid on inputs services - Courier Service used for export of goods.

Analysis:
The judgment involves four applications arising from a common order passed by the Commissioner (Appeals), addressing the denial of cenvat credit on service tax paid on inputs services, specifically Courier Service used for export of goods. The adjudicating authority initially denied the credit, a decision upheld by the Commissioner (Appeals).

The advocate for the applicant argued eligibility for credit on courier services, citing government notifications allowing refund of unutilized credit on export of goods. Invoices were produced to demonstrate that the rate quoted was on a Free on Board (FOB) basis without separate claims for freight and insurance. The advocate referenced Tribunal decisions supporting the eligibility of certain services as input services.

On the contrary, the Ld.A.R contended that the input credit or input service should be integral to the manufacture of final products, which was not the case here as it related to the transportation of export goods, not the manufacturing process. Reference was made to a Tribunal interim order in a similar case where predeposit was ordered.

After hearing both sides, the Bench acknowledged that the appellant had availed input service credit on courier services for exporting excisable finished goods. Citing a previous Tribunal decision, the Bench held that services like CHA, C&F, shipping, and courier services could be considered eligible input services. The judgment highlighted the importance of the 'place of removal' in determining eligibility for cenvat credit, emphasizing that services used for clearance of excisable goods from the 'place of removal' should be considered input services under the CENVAT Credit Rules, 2004.

Following the precedent set by the previous decision, the Bench concluded that the appellant had established a prima facie case for waiver of predeposit of tax, interest, and penalty. Consequently, the predeposit of tax, interest, and penalty was waived, and the recovery was stayed during the pendency of the appeal. All four stay applications were allowed as a result of this judgment.