2009 (10) TMI 570 - AT - Service Tax

Waiver of pre-deposit - Cenvat credit paid on the service tax - adjudicating authority has wrongly held at the end of the recipient of the service that the recipient of the service is not entitled to take the credit on this service - buyer has no responsibility in regard to ensuring that duty has been correctly paid by consignor - Once original assessment has not been varied, credit taken cannot be denied waiver allowed

Summary

Issues:
Waiver of pre-deposit of duty, interest, and penalty on Cenvat credit for service tax paid on environmental monitoring services.

Analysis:
The applicant, a cement manufacturer, sought waiver of pre-deposit of Rs. 2,00,845/- along with interest and penalty confirmed against them in the impugned order. The dispute arose from the availing of Cenvat credit on service tax paid for environmental monitoring services obtained from a supplier. The adjudicating authority held that the supplier did not fall under the category of Scientific and Technical Consultancy Service, thus disallowing the applicant's Cenvat credit claim and imposing a penalty. The applicant contended that they had paid the service tax on the services under proper invoice and were entitled to take Cenvat credit as per the rules. The advocate cited a relevant case to support the argument that the buyer is not responsible for ensuring correct duty payment by the consignor, and once the original assessment remains unaltered, credit cannot be denied.

The tribunal, after hearing the arguments, acknowledged that the applicant had a strong prima facie case in their favor. Consequently, the tribunal granted waiver of pre-deposit of duty, interest, and penalty, and stayed the recovery during the pendency of the appeal. The decision was based on the applicant's compliance with invoicing requirements and their entitlement to Cenvat credit as per the rules, supported by legal precedent. The tribunal's ruling favored the applicant's position, emphasizing the importance of following due process in claiming Cenvat credit and ensuring that the original assessment remains unchanged to uphold the right to credit.