2014 (7) TMI 447 - AT - Service Tax

Manufacturer's Predeposit Waiver Application Denied; CENVAT Credit Ineligibility; Proper Documentation Emphasized

The Appellate Tribunal CESTAT CHENNAI addressed an application for waiver of predeposit of tax, interest, and penalty by a manufacturer of aluminium rough ... Waiver of predeposit of tax - Denial of availment of CENVAT credit on outward freight and the warehousing of the final products after clearance of final products from the factory gate - Held that:- applicant is not eligible for availment of the credit of warehousing charges of the final products after clearance from the factory gate. Regarding the denial of credit on outward freight, the learned counsel submits that they have produced the documents that the invoices were raised on FOR destination basis which was not considered by the adjudicating authority. On perusal of the impugned order passed by the Commissioner (Appeals), I find that there is an observation that the applicant had not produced copies of documents such as agreement or so that the place of delivery is the door step of the buyer and the value of goods sold in inclusive of transportation charges. It is further observed that the copies of documents such as invoices submitted contain the remark “prices indicated are tentative”. - Conditional stay granted. Issues Involved:- Application for waiver of predeposit of tax, interest, and penalty.- Availment of CENVAT credit on outward freight and warehousing charges for final products.- Denial of credit by adjudicating authority and Commissioner (Appeals).The judgment by Appellate Tribunal CESTAT CHENNAI addressed the issue of waiver of predeposit of tax, interest, and penalty in applications filed by a manufacturer of aluminium rough castings and motor vehicle parts. The adjudicating authority and Commissioner (Appeals) had denied the applicant's availment of CENVAT credit on outward freight and warehousing charges for final products. The Tribunal, after hearing both sides and examining the records, found that the applicant was not eligible for the credit of warehousing charges post-clearance from the factory gate. However, regarding the denial of credit on outward freight, the Tribunal noted that the applicant had raised invoices on FOR destination basis, which was not considered by the adjudicating authority. The Commissioner (Appeals) had observed a lack of documents proving delivery at the customer's doorstep and tentative pricing on submitted invoices. The Tribunal directed Unit No. 1 to make a predeposit of Rs. 1,00,000 within six weeks, with the balance dues waived and recovery stayed during the appeal's pendency. The judgment emphasized the need for further examination of evidence regarding the delivery location and pricing during the appeal hearing.In conclusion, the Tribunal's judgment highlighted the importance of proper documentation and evidence to support claims for CENVAT credit on outward freight and warehousing charges. It differentiated between the treatment of warehousing charges and outward freight, directing a predeposit for one specific unit while waiving the balance dues for both units during the appeal process. The judgment underscored the significance of providing comprehensive documentation to substantiate claims and indicated a detailed examination of delivery locations and pricing would occur during the appeal hearing.