Appellant's Service Tax Credit Denied for Sales Office Rent - Pre-deposit Waived

The appellant's denial of credit for service tax paid on 'immovable property rent' for a sales office after the 'place of removal' was contested. The issue revolved around the interpretation of 'input services' concerning sales promotion activities. The court found that the appellant had a prima facie case for complete waiver of pre-deposit. Consequently, the pre-deposit of the demand was waived, and there was a stay against recovery during the appeal process.

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Issues:
1. Denial of credit of service tax paid on 'immovable property rent' on sales office after the 'place of removal'.
2. Interpretation of the definition of 'input services' in relation to sales promotion activities.

Analysis:
The judgment deals with the denial of credit of service tax paid on 'immovable property rent' for a sales office after the 'place of removal'. The appellant argued that sales offices are involved in sales promotion activities, which are covered under the definition of 'input services', making them eligible for Cenvat credit. On the other hand, the Authorized Representative contended that credit is only available up to the 'place of removal', citing a previous decision by the Hon'ble High Court of Karnataka. The key question was whether the restriction on credit availability 'up to the place of removal' applies to input services as per the definition.

The definition of 'input services' includes various activities such as sales promotion, storage up to the place of removal, and outward transportation up to the place of removal. The judge noted that the phrase 'up to the place of removal' appears after 'storage' and 'outward transportation', indicating where the credit restriction applies. Considering this, the judge found that the appellant had a prima facie case for complete waiver of pre-deposit. As a result, the pre-deposit of the demand was waived, and there was a stay against recovery during the appeal process. The order was dictated and pronounced in open court by B S V Murthy, J.

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