2014 (7) TMI 355 - AT - Central Excise

Tribunal approves stay applications, waives predeposit, recognizes 'place of removal' for cenvat credit

The Tribunal granted approval to stay applications and waived predeposit of duty, interest, and penalty until the appeals were disposed of. It found merit ... CENVAT Credit - Custom House Agent service - Whether appellants are eligible to avail cenvat credit of service tax paid on CHA, Courier services and C&F service - Held that:- Tribunal in the case of Nirma Ltd. [2007 (9) TMI 253 - CESTAT AHEMDABAD] had denied credit on this issue. But, in the latest decision of 'Pokarna Ltd.' (2013 (3) TMI 504 - CESTAT, BANGALORE) after discussing the scope of place of removal as mentioned in section 4 of the Central Excise Act had allowed the credit of service tax on CHA service. I find force in the submission of Ld. advocate that the goods cleared through consignment agent would be treated as 'place of removal' under Section 4 of the Central Excise Act. Therefore, prima facie, I do not find reason to deny credit on these services. Accordingly, I waive predeposit of duty along with interest and penalty till disposal of appeals - Stay granted. Issues Involved:Denial of cenvat credit on 'input service' including Custom House Agent service, courier service, and Clearing and Forwarding Services.Analysis:1. Denial of Cenvat Credit:The applicant filed applications against the denial of cenvat credit on specific input services. The advocate for the applicant argued that CHA services and courier services related to exports fall under the definition of 'input service' as per Cenvat Credit Rules, 2004, citing precedents like Plus Paper Foodpac Ltd. v. CCE Thane and CCE Hyderabad v. Pokarna Ltd. Additionally, the advocate highlighted CBEC Circular No.97/8/2007-ST to support their claim. They also emphasized that service tax was paid on the consignment agent's commission, treating the consignment agent's premises as the 'place of removal.'2. Contrary Arguments:The Revenue's representative contended that previous Tribunal decisions, such as Excel Crop Care Ltd. v. CCE Ahmedabad and Nirma Ltd. v. CCE Bhavnagar, denied credit on CHA and C&F services. Reference was made to the definition of 'input service' under Cenvat Credit Rules in light of the Supreme Court's decision in Ramala Sahkari Chini Mills Ltd. v. CCE Meerut and the Tribunal's ruling in TELCO Construction Equipment Co. Ltd. v. CCE & Customs Belgaum.3. Limitation Issue:The advocate argued that the demand was time-barred, while the adjudicating authority extensively discussed the invocation of the extended period of limitation.4. Tribunal's Decision:After hearing both parties and examining the records, the Tribunal deliberated on the eligibility of availing cenvat credit for CHA, courier, and C&F services. While the Tribunal had previously rejected an appeal in Nirma Ltd., the recent decision in Pokarna Ltd. allowed the credit for service tax on CHA service. The Tribunal found merit in the argument that goods cleared through a consignment agent should be considered the 'place of removal' under the Central Excise Act, thus supporting the applicant's claim. Consequently, the Tribunal waived the predeposit of duty, interest, and penalty until the appeals were disposed of, granting approval to both stay applications.This detailed analysis of the judgment provides a comprehensive overview of the issues involved and the Tribunal's decision regarding the denial of cenvat credit on specific input services.