2010 (5) TMI 465 - AT - Service Tax

Waiver of pre-deposit cenvat credit of service tax Input service Credit of service tax paid on telephone service availed - providing services of Authorized Service Station as per vide Circular No. 59/8/2003-S.T Service Tax credit availed cannot be denied - prima facie case for the waiver of the pre-deposit pre-deposit waived

Summary

Issues: Stay petition for waiver of pre-deposit of Cenvat credit amount confirmed by authority for reversal of credit on Service Tax paid on Telephone Services, interest, and penalty under Rule 15(1) of Cenvat Credit Rules, 2004.

Analysis:
- The appellant filed a stay petition seeking waiver of pre-deposit of Rs. 1,93,739/- and Rs. 52,700/- confirmed for the reversal of Cenvat credit on Service Tax paid on Telephone Services, along with interest and penalty under Rule 15(1) of Cenvat Credit Rules, 2004.
- After hearing both sides and examining the records, it was found that the demand confirmation, penalty, and interest were based on the appellant availing Cenvat credit on 'Telephone Services' due to providing services of an Authorized Service Station.
- The Adjudicating Authority referenced Circular No. 97/8/2007, which clarified that credit of service tax paid in respect of mobile telephone service is admissible under the Cenvat Credit Rules, 2004, provided the mobile phone is used for providing output service or in relation to the manufacture of finished goods.
- Considering the circular, it was concluded that the Service Tax credit availed by the appellant cannot be denied, and the revenue cannot argue against its own circular. Therefore, a prima facie case for the waiver of pre-deposit of the amounts was established.
- Consequently, the application for the waiver of pre-deposit of the indicated amounts was allowed, and the recovery was stayed until the appeal's disposal. The decision was pronounced and dictated in open court by the Member (J) of the Appellate Tribunal CESTAT, Bangalore.