2009 (6) TMI 893 - AT - Central Excise

Summary

Issues:

1. Confirmation of demand based on availing Cenvat credit on service tax paid by head office.
2. Interpretation of Board's Circular No. 97/7/2007-S.T. regarding Input Service Distributor.
3. Application for waiver of pre-deposit of the demanded amount.

Confirmation of Demand:
The judgment addressed the confirmation of demand arising from the appellant availing Cenvat credit on service tax paid by their head office, registered as an "Input Service Distributor." The services included various expenses like advertisement, telephone, security services, insurance, and others meant for products manufactured by units at different locations. The Adjudicating Authority dropped proceedings, but the Commissioner (Appeals) reversed it, confirming the demand and imposing penalties.

Interpretation of Circular:
The appellant relied on Board's Circular No. 97/7/2007-S.T., dated 23-8-2007, specifically pointing to Para 2.3, which discusses the role of an "input service distributor" in distributing service tax credits. The circular outlines conditions for credit distribution, emphasizing that the credit should not exceed the tax paid and should not be distributed for services used in units exclusively dealing with exempted goods or services. The tribunal found that the conditions mentioned in the circular did not apply to the appellant's case, supporting a prima facie case for the waiver of the pre-deposit.

Application for Waiver:
After considering the issue and the circular's provisions, the tribunal allowed the application for the waiver of the pre-deposit of the demanded amount. The tribunal stayed the recovery of the amount until the appeal was disposed of, highlighting that the appellant had made a prima facie case for the waiver based on the interpretation of the circular and the specific conditions outlined therein.

This detailed analysis of the judgment covers the issues related to the confirmation of demand, the interpretation of the Board's Circular, and the application for the waiver of pre-deposit, providing a comprehensive understanding of the decision rendered by the Appellate Tribunal CESTAT BANGALORE.