2012 (12) TMI 1061 - AT - Service Tax

Waiver and stay of proceedings - CENVAT credit - relevant invoices were not issued to the insurance company but to the vehicle owners - Held that - the stay orders produced by the learned consultant for the appellant found to have presented a precedent to be followed - waiver and stay granted.

Summary

Issues:
1. Denial of CENVAT credit on "Authorized Service Station Services" and imposition of penalty.
2. Comparison with stay orders in similar cases.
3. Recognition of service as an input service and denial of CENVAT credit based on invoice recipients.
4. Consideration of high stakes involved in the cases.

Issue 1: Denial of CENVAT credit and penalty:
The adjudicating authority denied CENVAT credit of over Rs. 35.4 crores on "Authorized Service Station Services" to the appellant and imposed an equal amount of penalty. The appellant's consultant presented stay orders from similar cases, arguing for a waiver based on a prima facie case. The Addl. Commissioner acknowledged the similarity but noted the appellant's failure to convincingly challenge the adjudicating authority's findings on the proportionate credit claim.

Issue 2: Comparison with stay orders:
The appellant's consultant cited stay orders from comparable cases to support the claim for waiver and stay. The Bench found the issues in those cases to be similar, leading to the decision to grant waiver and stay in the present case.

Issue 3: Recognition of service as input service and invoice recipients:
The key issues revolved around whether the service qualified as an input service and if CENVAT credit could be denied based on the issuance of invoices to vehicle owners instead of the insurance company. The stay orders presented as precedents by the appellant's consultant were deemed relevant in deciding to grant waiver and stay in this case.

Issue 4: Consideration of high stakes:
The judgment acknowledged the high stakes involved in all the cases under consideration. It was highlighted that either party could request an out-of-turn hearing before the Bench due to the significant financial implications at hand.

The judgment by the Appellate Tribunal CESTAT CHENNAI addressed the denial of CENVAT credit and imposition of penalties on "Authorized Service Station Services." The decision was influenced by the comparison with stay orders from similar cases, the recognition of the service as an input service, and the consideration of high financial stakes. The Bench granted waiver and stay based on the presented precedents and the acknowledgment of the significant amounts involved in the appeals.