Cenvat credit on return freight for empty cylinders accepted as input service, securing waiver of pre-deposit and stay of recovery.

Cenvat credit on transportation charges for return of empty cylinders was treated as a prima facie eligible input service where the cylinders were necessary for transporting Titanium Dioxide and gases. The Tribunal accepted that the freight incurred for returning the empty cylinders formed part of the service chain used to move the goods, and that the appellant had a strong case on admissibility. On that basis, waiver of pre-deposit was granted and recovery was stayed, pending further consideration.

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Issues: Whether the appellant was entitled to waiver of pre-deposit and stay of recovery in respect of Cenvat credit availed on transportation charges for return of empty cylinders used for transporting Titanium Dioxide and gases.

Analysis: The appellant claimed that cylinders were necessary for transporting the product and gases, so the freight charges for return of empty cylinders were part of input service. The Tribunal recorded a prima facie view that gases could not be transported without cylinders and that the appellant had a strong case.

Outcome: Waiver of pre-deposit and stay of recovery were granted.

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