2011 (1) TMI 1064 - AT - Service Tax

Waiver of pre-deposit - Appellants herein along with fifteen others had taken various input services against a single invoice in respect of each credit relating to different services - Held that - As found in stay order 2010 (10) TMI 403 - CESTAT, BANGALORE the Tribunal had waived pre-deposit of similar dues in respect of 10 other appellants subject to the condition that the appellants did not utilize the impugned credit which was modified and the appellants allowed to freeze 75% of the credit demanded which alone was available in their accounts and to make good the balance 25% with the credit as and when earned before the appeal is decided. Thus these applications in the present case are allowed on the same terms as regards freezing of the available 75% credit with similar undertaking by 9-2-2011 before the Assistant Registrar of this Bench.

Summary

Issues:
Waiver of pre-deposit of confirmed amounts against each appellant for irregularly taken credit of input services without proper documentation.

Analysis:
The applications sought waiver of pre-deposit for confirmed amounts against each appellant who had taken various input services against a single invoice, without proper documentation as per Rule 9(2) of the Cenvat Credit Rules, 2004. The Commissioner (Appeals) confirmed the demand of impugned credit irregularly taken under Rule 14 of the CCR and imposed penalties under Rule 15 of the CCR. Each invoice was addressed to a party not registered as a service provider, raising concerns about the legitimacy of the credit claimed.

After considering both sides, the Tribunal referred to previous Stay Orders where pre-deposit of similar dues was waived subject to conditions. In those cases, appellants were allowed to freeze 75% of the demanded credit available in their accounts and utilize the remaining 25% only when earned before the appeal decision. Following this precedent, the current applications were allowed on the same terms. Appellants were instructed to report compliance by a specified date with a certificate from the jurisdictional Range Superintendent of Service Tax confirming the freezing of the 75% credit.

The judgment emphasized consistency with previous orders and the importance of complying with the specified conditions to avail the waiver of pre-deposit. The Tribunal's decision aimed to balance the interests of the appellants with the need for proper documentation and adherence to Cenvat Credit Rules. Appellants were granted relief under specific conditions to address the irregularities in claiming input service credit without adequate supporting documents. Compliance with the prescribed terms was crucial for the appellants to benefit from the waiver granted by the Tribunal.