1. Vide the impugned order the Commissioner (Appeals) sustained the order of the original authority demanding an amount of Rs. 99,439/-held to be inadmissible CENVAT credit availed by the appellants M/s. Karur KCP Packaging (P) Ltd. during 4-11-2006 to 9-11-2006, applicable interest and a penalty of equal amount imposed under Section 11AC of the Central Excise Act. The demand is raised on two counts; the inadmissible credit of service tax paid under C&F agent service up to the Port area in relation to finished goods exported and CENVAT credit of service tax availed on the strength of documents not prescribed for the purpose in the Central Excise Rules.

2. Moving the application for waiver of pre-deposit the learned Counsel for the appellants submits that the lower authorities had denied credit of service tax incurred under C&F agents’ service in relation to export of their finished goods for the reason that the CBEC Circular No. 91/8/2007-S.T., dated 23-8-2007 which clarified admissibility to credit of such service tax incurred up to place of removal of finished goods was issued in August 2007 and the same did not apply to similar transactions prior to 23-8-2007. It is submitted that the authorities did not deny that the credit availed was admissible in terms of the Circular of the Board dated 23-8-2007. He also relies on the following decisions of the Tribunal wherein it was held that the services availed by the exporter till the Port area were required to be considered as input service inasmuch as the same were clearly related to the business activities and the ownership of the goods remained with the seller till the Port area :-

(i)Commissioner of Central Excise, Rajkot v. Rolex Rings Pvt. Ltd. - 2008 (230) E.L.T. 569 (Tri. - Ahmd.) = 2008 (2) LCX 79;

(ii)Commissioner of Central Excise, Rajkot v. Adani Pharmachem Pvt. Ltd. - 2008 (12) S.T.R.. 593 (Tri. - Ahmd.) = 2008 (232) E.L.T. 804 (Tri.).

As regards the finding that credit of service tax paid was irregularly availed by the appellants on the strength of debit notes the learned Counsel reiterates the appellants’ submission made before the lower authorities that the debit notes were nothing but bills raised by the provider of service of the appellants. He also submits a copy of a certificate issued by M/s. Vidyavikas Educaids Pvt. Ltd. certifying that they have raised debit notes for various amounts on various days on the appellants and that the same were nothing but bills/invoices as reflected in their accounts. It is submitted that the denial of service tax credit on the ground that the same was availed against debit notes is not sustainable. I have also heard the learned SDR who reiterates the reasoning contained in the impugned order.

3. On a careful consideration of the facts of the case and the submissions by both sides I find that the appellants have made out a prima facie case against the impugned demand and penalty on the strength of the case law submitted as well as the certificate issued by M/s. Vidyavikas Educaids Pvt. Ltd. I find that credit of service tax paid under C&F Agents service was incorrectly denied on the ground that the Board Circular came to be issued subsequent to the material period. The documents called debit notes had apparently contained all the particulars required to be provided in an invoice were adequate to avail CENVAT credit. In the circumstances it is ordered that there shall be waiver of pre-deposit and stay of recovery of the adjudged dues pending decision in the appeal.