2011 (4) TMI 497 - AT - Service Tax

Waiver of pre-deposit - Use of cenvat credit on inputs for payment of service tax on output services - eligibility of cenvat credit - Since erection of unipoles is done by the appellant after the unipoles are fabricated by using the angles tubes sections and plates - Held that - whether the goods MS angles tubes plates sections sheets channels bars etc. would fall under the category of tubes and fittings under Capital Goods is an arguable issue and not free from doubt and eligibility for cenvat credit can be gone into detail only at the time of final disposal of the appeal - Prima facie the appellant has not made out the case for complete waiver of the amounts involve - Appeal is disposed accordingly.

Summary

Issues:
1. Eligibility of cenvat credit on MS angles, tubes, plates, sections, sheets, channels, bars, etc.
2. Waiver of pre-deposit of Service Tax, interest, and penalty amounts.

The judgment by the Appellate Tribunal CESTAT, Bangalore, involved a stay petition for the waiver of pre-deposit of Service Tax amounting to Rs.36,62,672 under Section 73(1) of the Finance Act, 1994, along with applicable interest, and an equal amount of penalty under Rule 15(2) of the Cenvat Credit Rules, 2004. The Adjudicating Authority had confirmed the demand of Service Tax, stating that the appellant was not eligible to avail cenvat credit on certain materials used for constructing unipoles for displaying advertisements. The appellant argued that unipoles were essential for rendering advertisement services and that they were paying Service Tax liability for all structures used for displaying advertisements. The issue revolved around the eligibility of cenvat credit on the materials used for constructing unipoles.

Upon considering the submissions from both sides, the Tribunal noted that the erection of unipoles by the appellant involved the use of MS angles, tubes, plates, sections, sheets, channels, bars, etc. The eligibility of these materials for cenvat credit, particularly whether they fell under the category of 'tubes and fittings' under 'Capital Goods,' was deemed arguable and not free from doubt. The Tribunal determined that a prima facie case for complete waiver of the amounts involved had not been established by the appellant. Consequently, the Tribunal directed the appellant to pre-deposit an amount of Rs.15,00,000 within eight weeks and report compliance by a specified date. Upon compliance, the recovery of the balance amounts was stayed until the appeal's final disposal.

In conclusion, the judgment addressed the issue of cenvat credit eligibility on specific materials used for constructing unipoles for advertisement display. The Tribunal emphasized the need for further examination of the eligibility criteria at the final disposal stage, while requiring the appellant to make a partial pre-deposit before proceeding with the appeal process.