2013 (1) TMI 633 - AT - Service Tax

Stay petition - Waiver of pre-deposit - Cenvat credit of Service Tax paid by an outside agency, who conducts the repair and maintenance of the product manufactured by the appellant and supplied to their customers - Revenue argue that the documentary evidences provide in respect of only one or two contracts, wherein it was specifically indicated that the appellant has engaged a service provider for rendering the services on their behalf - Assessee contended that they will be able to produce the evidences in respect of all the contracts - Held that - This issue needs reconsideration by the first appellate authority afresh, after following the principles of natural justice and allowing the appellant to adduce further evidences in support of their claim - Remand back to A.O.

Summary

Issues:
1. Stay petition for waiver of pre-deposit of confirmed in-eligible CENVAT Credit.
2. Justification of availing CENVAT Credit for Service Tax paid by an outside agency.
3. Lack of documentary evidence for engaging service provider for repair and maintenance services.
4. Need for factual appreciation to determine contractual obligation for availing CENVAT Credit.
5. Reconsideration by the first appellate authority after allowing the appellant to provide further evidences.

Analysis:

The judgment pertains to a Stay Petition seeking waiver of pre-deposit of the amount confirmed as in-eligible CENVAT Credit due to the appellant availing Service Tax paid by an outside agency for repair and maintenance services. The Tribunal observed that the appeal itself could be disposed of at the current stage. It was noted that the issue revolved around the credit of Service Tax paid by the outside agency for services rendered on behalf of the appellant. The first appellate authority found insufficient documentary evidence regarding the engagement of the service provider for specific contracts. The appellant expressed readiness to produce evidence for all contracts in question.

The Tribunal emphasized the need for factual appreciation to determine if the services provided by the outside agency were a contractual obligation. It was highlighted that the question of availing CENVAT Credit should be assessed based on this factual matrix. Consequently, the Tribunal opined that the issue required reconsideration by the first appellate authority. They directed a fresh assessment following principles of natural justice, allowing the appellant to present additional evidence to support their claim. Importantly, the Tribunal clarified that they had not expressed any opinion on the merits of the case, leaving all issues open for the first appellate authority to decide after evaluating the new evidence.

Ultimately, the appeal was allowed by way of remand, signifying a referral back to the first appellate authority for a fresh determination based on the additional evidence that may be provided by the appellant. This comprehensive analysis underscores the importance of factual substantiation and adherence to procedural fairness in resolving the complex issue of availing CENVAT Credit for Service Tax paid by an outside agency.