2013 (12) TMI 1222 - AT - Service Tax

Tribunal sets amounts, interest, penalties in CENVAT credit dispute over 'input services' under

The Tribunal confirmed specific amounts for different periods, along with interest and penalties, in a dispute concerning the interpretation of 'input ... Denial of cenvat credit on various services – Waiver of Pre-deposit – Held that:- The main disputed services are, services like Man-power and Recruitment Agency, Management Consultants, Royalty Services etc. - Relying upon M/s BATA INDIA LTD Versus COMMISSIONER OF CENTRAL EXCISE, CHENNAI-III [2013 (12) TMI 923 - CESTAT CHENNAI] - for services of Man-power Recruitment Agency, Management Consultants, Royalty Services, transportation of goods from Regional Distribution Centers (RDC) to Retail outlets etc., stay was granted on all the items of services except in respect of tax relating to ‘transportation of goods' from RDCs to retail outlets - The total amount involved in such transportation in these two cases will be around Rs.80,000/- only in the present appeals - the applicant directed to make a deposit of Rupees Eighty Thousand as pre-deposit – stay not granted. Issues:1. Interpretation of 'input services' under Rule 2(l) of the CENVAT Credit Rules, 2004.2. Denial of CENVAT credit for services rendered at Corporate Office and Regional Distribution Centers.3. Adjudication of confirmed amounts, interest, and penalties.4. Stay petitions and pre-deposit requirements for appeal admission.Interpretation of 'input services' under Rule 2(l) of the CENVAT Credit Rules, 2004:The applicant, a footwear manufacturer, availed CENVAT credit on various input services like Goods Transportation, Courier, Car Hire, Telecom Maintenance, and others. The dispute arose as the Revenue contended that these services rendered at the Corporate Office and Regional Distribution Centers lacked nexus with manufacturing activities, leading to the initiation of proceedings to deny the CENVAT credit. The applicant argued that the descriptions of input services were unclear in the show-cause notice and the impugned order, providing a detailed break-up of services rendered and credits taken. The Tribunal considered disputed services like Man-power and Recruitment Agency, Management Consultants, and Royalty Services, emphasizing the amounts involved in transportation of goods from Regional Distribution Centers to Retail Outlets.Denial of CENVAT credit for services rendered at Corporate Office and Regional Distribution Centers:After adjudication, specific amounts for different periods were confirmed along with interest and penalties. The Tribunal noted that in a previous matter related to the applicant, stay was granted on various services except for the transportation of goods from Regional Distribution Centers to Retail Outlets. Considering the precedent order, the Tribunal directed the applicant to make a pre-deposit for the transportation amount, linking these appeals with the previous case for final disposal after compliance.Adjudication of confirmed amounts, interest, and penalties:The confirmed amounts for different periods were Rs.96,71,884/- and Rs.1,22,85,920/-, along with interest and penalties. The Tribunal's decision to waive the pre-deposit of the balance adjudged dues for appeal admission, subject to the pre-deposit of the transportation amount, aimed at ensuring compliance and proper disposal of the appeals linked to the previous case.Stay petitions and pre-deposit requirements for appeal admission:The applicant filed appeals before the Tribunal along with stay petitions, which were taken up together for disposal. The Tribunal directed the applicant to make a pre-deposit for the transportation amount within a specified period, allowing the appeals' admission and staying the collection of the balance dues until the final disposal of the appeals linked with a previous case. Compliance with the pre-deposit was set as a condition for further proceedings.