2011 (5) TMI 432 - AT - Service Tax

Application of stay - Waiver of pre-deposit - Denial of cenvat credit - amount is adjusted by the Adjudicating Authority denying the Cenvat credit on towers, pre-fabricated buildings and an accessory thereof on the ground the same are not capital goods - appellant has made out a prima facie case for the waiver of the pre-deposit of the amount involved - Application for waiver of the pre-deposit of the amount is allowed and recovery thereof stayed till the disposal of the appeal

Summary

Issues:
- Denial of Cenvat credit
- Waiver of pre-deposit amount
- Identical situations in previous judgments

Denial of Cenvat credit:
The appellant filed a stay application seeking waiver of the denial of Cenvat credit amounting to Rs.5,88,13,400, along with interest and penalty. The Adjudicating Authority had denied the credit on towers, pre-fabricated buildings, and related accessories, stating they did not qualify as capital goods. The appellant's counsel cited precedents from coordinate benches where unconditional waivers were granted in similar situations, referencing cases like Idea Cellular Ltd. vs. CCE, Ahmedabad-III, and Bharti Tele-Ventures Ltd. vs. CCE, Pune. The Departmental Representative supported the Adjudicating Authority's findings, highlighting that besides towers, other items were also involved in availing credit. After considering both arguments, the Tribunal found the case's facts akin to the one where the High Court had struck down a similar order. Consequently, the Tribunal allowed the waiver of the pre-deposit amount and stayed its recovery until the appeal's disposal.

Waiver of pre-deposit amount:
The Tribunal, upon analyzing the submissions and legal precedents presented by the appellant and the Departmental Representative, acknowledged the similarities between the current case and the one where the High Court had invalidated a similar order. This recognition led the Tribunal to conclude that the appellant had established a prima facie case warranting the waiver of the pre-deposit amount. As a result, the Tribunal granted the application for waiver and stayed the recovery of the disputed amount until the appeal's final resolution. The Tribunal also directed the Registry to list the appeal for disposal along with other related matters scheduled for a final hearing on a specified date.

Identical situations in previous judgments:
The Tribunal noted the appellant's reliance on judgments from coordinate benches and the subsequent challenges in High Courts, emphasizing the similarities in facts between the present case and the one where the High Court had overturned a Tribunal's decision. By drawing parallels with the precedent, the Tribunal found merit in the appellant's argument for waiver, leading to the decision to grant the waiver and stay the recovery process. This alignment with previous judicial outcomes underscored the Tribunal's determination to ensure consistency and fairness in the application of legal principles and precedents in similar cases.