CESTAT recalls stay order despite non-representation, directs deposit for service tax credit denial. Insufficient evidence on FOR sales.

The Appellate Tribunal CESTAT NEW DELHI recalled a stay order in the interest of justice despite the appellant's non-representation during a modification application. The tribunal directed the appellant to deposit Rs.1 lakh within six weeks for service tax credit denial on transportation charges, with the balance amount waived. The tribunal found insufficient evidence to support the appellant's claim of sales on FOR basis, leading to the decision on pre-deposit. Compliance would be reviewed on 07.03.2013, and the ROA application and stay petition were disposed of accordingly.

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Issues: Compliance of stay order, restoration application, availability of service tax credit on transportation charges, definition of input service, pre-deposit of amount, disposal of ROA application and stay petition.

In this judgment by the Appellate Tribunal CESTAT NEW DELHI, the issue at hand was the compliance of a stay order dated 17.05.2012 and a subsequent modification application. The appellant's advocate submitted that the stay order was passed ex-parte, and a modification application was dismissed for non-prosecution. A restoration application was then filed requesting the recall of the stay order. The respondent opposed the restoration application, citing the appellant's non-representation during the modification application as a sign of malafide. However, the tribunal, while acknowledging the lack of appearance by the appellant, decided to recall the stay order in the interest of justice and proceeded to hear the stay petition.

Regarding the service tax credit on transportation charges, an amount of Rs.4,39,481/- was confirmed against the appellant for denying them the benefit of transportation charges claimed from customers for supplying final products. The lower authorities contended that service tax credit for GTA service was not available as sales were not on FOR basis during the period in question. The appellant argued that their sales were on FOR basis, but the tribunal found insufficient evidence to support this claim. Consequently, the tribunal directed the appellant to deposit Rs.1 lakh within six weeks, with the balance amount of duty and penalty waived and recovery stayed during the appeal's pendency.

The tribunal noted the amendment in the definition of input service from clearances of final products from the place of removal to clearances of final products up to the place of removal. Despite the appellant's assertions, the tribunal found inadequate documentary evidence to establish sales on FOR basis, leading to the decision on pre-deposit. The judgment concluded by stating that compliance would be reviewed on 07.03.2013, and the ROA application and stay petition were disposed of in the aforementioned manner.

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