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of <h1>Appellate Tribunal grants waiver of service tax pre-deposit for footwear manufacturer</h1> <h3>METRO SHOES PVT. LTD. Versus COMMISSIONER OF C. EX., MUMBAI-I</h3> METRO SHOES PVT. LTD. Versus COMMISSIONER OF C. EX., MUMBAI-I - 2007 (8) S.T.R. 502 (Tri. - Mumbai) Issues: Application for waiver of pre-deposit of service tax amount, denial of Cenvat credit, penalty, interest payable, definition of input service, admissibility of service tax credit on various input services, denial of credit by the Commissioner, payment made for stay, waiver of balance amount.In this judgment by the Appellate Tribunal CESTAT MUMBAI, the issue at hand was an application for the waiver of pre-deposit of service tax amounting to Rs. 78,50,491, for which Cenvat credit was denied along with a penalty of an equivalent amount and interest payable on the amounts demanded. The applicant, engaged in manufacturing and trading of footwear and accessories, faced denial of Cenvat credit on various input services such as Business Auxiliary Services, Advertising, Agency Services, and more. The Commissioner denied the credit, arguing that services of commission agents were not related to the manufacture of goods. The applicant contended that commission agents promoted sales and were entitled to the credit. The Tribunal noted that the definition of input service includes services for advertisement or sale promotion, which should be covered under the credit. Additionally, the Commissioner denied credit on services common to all activities, even though some services were only for the applicant's products.Regarding the specific amounts in dispute, Rs. 53,29,447 related to commission agent services for promoting the sale of goods manufactured by the appellant, which the Tribunal found prima facie covered under the definition of input service. Another amount of Rs. 13,27,497 had already been deposited, and Rs. 6,59,506 related to advertisement services, where the Commissioner failed to show evidence of the advertisement being for both manufactured and traded goods. The Tribunal considered the applicant's prima facie case in their favor and deemed the payment of Rs. 13,27,497 as sufficient deposit. Consequently, the Tribunal waived the pre-deposit of the balance amount of duty, interest, and penalty, staying the recovery until the appeal's disposal. The judgment highlighted the importance of the definition of input service and the admissibility of service tax credit on various input services, emphasizing the need for evidence and proper justification in denying such credits.
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