TMI Blog2011 (7) TMI 240X X X X Extracts X X X X X X X X Extracts X X X X ..... emblies chargeable to Central Excise Duty under sub-heading 87141900 of the Central Excise Tariff; They also availed Cenvat credit of Central Excise Duty paid on inputs and capital goods and of service tax paid on 'input services' as per the provisions of Cenvat Credit Rules, 2004 (hereinafter referred to as CCR, 2004). The period of dispute in this case is from April 2006 to December 2008. The appellant while receiving orders from their customers sell the goods from their factory after issue of an invoice and dispatch the goods to their customers through courier. The courier service is a taxable service and the appellant accordingly availed Cenvat credit of service tax paid on the courier service availed by them for dispatch of the final products to their customers. The total Cenvat credit so availed during period from April 2006 to December 2008 is Rs. 2 ,61,07,159 /-. The department was of the view that the courier service availed for dispatch of the goods to their customers being in the nature of outward freight from the place of removal is not covered by the definition of 'input service' as given in Rule 2 (I) of CCR, 2004. It is on this basis that a show cause notice dated 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f an amount of Rs.1,72,95,410/- for the period prior to March 2008, when in view of the definition of 'input service', as it existed during that period, the Larger Bench of the Tribunal in the case of ABB Ltd. vs. CCE ST, Bangalore (supra) has held that the service of goods transport agency availed for outward transportation of the final products from the place of removal would be covered by the definition of 'input service', that the appellant have a strong prima facie case and hence the requirement of pre-deposit of the balance amount of Cenvat credit demand, interest and penalty may be waived for hearing of the appeal and recovery thereof stayed till the disposal of the appeal. 2.2 Shri I. Beg, the learned Departmental Representative, opposing the stay application pleaded that the judgment of Larger Bench in the case of ABB Ltd. vs. CCE ST, Bangalore (supra) cited by the learned Senior Counsel for the appellant has been stayed by Hon'ble Karnataka High Court, that the Tribunal in the case of India Cements Ltd. vs. CCE, Trichy reported in 2010 (249) E.L.T. 530 (Tri. - Chennai) has held that during the period prior to 1st March 2008, GTA service availed for outward trans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on to setting up, modernization, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage upto the place of removal, procurement of inputs, activities relating to business, such as accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, and security, inward transportation of inputs or capital goods and outward transportation upto the place of removal ; 4.1 With effect from 1/3/08 this Rule was amended and in clause (ii) of the main definition, the words "and clearance of final product from the place of removal were deleted". According to the appellant, in respect of period from 1/3/08 to December 2008, they have already reversed Cenvat credit of Rs. 88,11,749/- and reported to the department vide letter dated 19/1/09 and beside this, they have also paid an interest of Rs. 5,41,563/- in respect of the same and as such, the dispute is only in respect of the balance amount of Rs.1,72,95,410/-pertaining to the period prior to 1/3/08. The main plea of the appellant is tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Board's clarification in this Circular, for treating a sale transaction as on FOR destination basis, the following three conditions must be satisfied : - (i) the ownership of goods and the property in the goods remain with the seller of the goods till the delivery of the goods in acceptable condition to the purchaser at his door step ; (ii) the seller bears the risk of loss of or damage to the goods during transit to the destination ; and (iii) the freight charges are integral part of the price of goods. According to the Board's Circular, if the above three conditions are satisfied or in other words the assessable value of the goods on which duty is paid is the FOR destination price, the Cenvat credit of the service tax on freight upto the customer's premises would be admissible. Based on this Circular of the Board, Hon'ble Punjab Haryana High Court in the case of CCE, Ludhiana vs. Ambuja Cements Limited reported in 2009 (14) S.T.R. 3 (P H) has held that the service of outward transportation of finished goods from the factory/depot to the customer's premises can be treated as input service if the above-mentioned conditions of the Board Circular dated 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngalore (supra), on the issue as to whether during the period prior to 1/3/08 Cenvat credit of service tax paid on outward freight was available, when the sales were not on FOR destination basis and the freight was not part of the assessable value the Department still has a good arguable case. In this case, the appellant have not produced any evidence to show that the assessable value of the goods included the courier charges for despatching the same to the customers. 8. In view of the above discussion, and also keeping in view the judgments of Hon'ble Supreme Court in the cases of Benara Valves Ltd. vs. CCE reported in 2006 (204) E.L.T. 513 (S.C.) and Indu Nissan Oxo Chemicals Industries Ltd. vs. Union of India reported in 2008 (221) E.L.T. 7 (S.C), wherein Hon'ble Supreme Court has held that the question of dispensation from the requirement of pre-deposit under Section 35F of Central, Excise Act, 1944 must be decided on the twin consideration of "undue hardship to the assessee" and imposing condition for safeguarding the interests of the Revenue, this is not a case for total waiver from the requirement of pre-deposit. We, therefore, direct the appellant to deposit an amount of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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