2013 (2) TMI 590 - AT - Central Excise

Tribunal grants delay application, upholds CENVAT credit eligibility, and sets aside lower authority decision

The Tribunal allowed the condonation of delay application against Order-in-Appeal No. SB(59-60) 59-60/MI/2010, citing satisfactory reasons for the delay. ... Eligible input service under Rule 2(1) of the CENVAT Credit Rules, 2004 - CENVAT credit of service tax on storage and warehousing at depot - place of removal as defined in Section 4(3)(c) of the Central Excise Act, 1944 - finality of unchallenged appellate orderPlace of removal as defined in Section 4(3)(c) of the Central Excise Act, 1944 - eligible input service under Rule 2(1) of the CENVAT Credit Rules, 2004 - CENVAT credit of service tax on storage and warehousing at depot - finality of unchallenged appellate order - Entitlement to CENVAT credit of service tax paid on storage and warehousing charges at the depot from which the assessee sells goods, and the effect of an earlier unchallenged appellate order allowing such credit. - HELD THAT: - The tribunal found as a fact that the assessee sells goods from the depot and that the depot is the place of removal within the meaning of Section 4(3)(c) of the Central Excise Act, 1944. Where the place of removal is the depot, services received up to that place, including storage and warehousing services, qualify as input services under Rule 2(1) of the CENVAT Credit Rules, 2004 and the CENVAT credit of service tax paid on those services is permissible. Further, an earlier order of the appellate authority allowing credit for a previous period was not challenged by the department and has therefore attained finality; the department cannot reopen the same question for a different period in the circumstances presented. Applying these principles, the impugned denial of credit was unsustainable.Impugned order set aside; appeals allowed with consequential relief and stay applications disposed of.Final Conclusion: Where the depot is the place of removal, service tax paid on storage and warehousing at the depot is an eligible input service under Rule 2(1) of the CENVAT Credit Rules, 2004; an earlier appellate order allowing such credit which was not challenged attains finality and the denial in the impugned order is set aside. Issues:1. Condonation of delay application filed against Order-in-Appeal No. SB(59-60) 59-60/MI/2010.2. Eligibility of CENVAT credit on storage and warehousing charges paid at the depot.Analysis:1. The judgment addresses the condonation of delay application filed against Order-in-Appeal No. SB(59-60) 59-60/MI/2010 dated 18.10.2010. The appellant had initially filed a composite appeal against two orders but later revised the appeal separately. The reason for the delay was considered satisfactory, and the application was allowed by the Tribunal.2. The main issue in the case pertains to the eligibility of CENVAT credit on storage and warehousing charges paid at the depot. The appellant sells goods from the depot, considering it as the place of removal. The department disputed this classification, arguing that the service tax credit was availed after manufacturing operations were completed. The lower appellate authority upheld the denial of credit along with interest.3. The appellant's representative argued that a previous order by the appellate authority had allowed CENVAT credit on similar charges for a different period, which was not challenged by the department and had attained finality. Citing judgments from the High Courts of Andhra Pradesh and Gujarat, the representative contended that storage and warehousing charges are eligible input services under the CENVAT credit Rules, 2004.4. The Department's representative conceded the issue, acknowledging the appellant's entitlement to the credit.5. The Tribunal, after considering the submissions, noted that the appellant sells goods from the depot, which qualifies as the place of removal under the Central Excise Act, 1944. As per Rule 2(1) of the CENVAT Credit Rules, service tax paid on services up to the place of removal is eligible for credit. Since the appellate authority's decision allowing the credit was not challenged by the department, the issue was deemed final. Therefore, the Tribunal set aside the impugned order, allowing the appeals and disposing of the stay applications.This comprehensive analysis covers the issues of the condonation of delay application and the eligibility of CENVAT credit, providing a detailed overview of the Tribunal's judgment.