2013 (4) TMI 148 - AT - Service Tax

Waiver of per-deposit - CENVAT Credit of the service tax as input services received at windmill site - generation of electricity - Held that - the issue seems to be prima facie covered by the decision of the Division Bench of this Tribunal in the case of Rajhans Metal Pvt. Ltd. 2007 (9) TMI 34 - CESTAT, AHMEDABAD - he appellant has not made out a prima facie case for complete waiver of pre-deposit of the amounts involved. - stay granted partly.

Summary

Issues:
- Stay petition for waiver of per-deposit of an amount confirmed as ineligible CENVAT Credit
- Interpretation of CENVAT Credit rules for services rendered at windmill site
- Applicability of limitation period on the demand raised
- Prima facie case for complete waiver of pre-deposit

Analysis:
1. The Stay Petition was filed seeking a waiver of the per-deposit of an amount confirmed as ineligible CENVAT Credit, interest, and penalty. The issue revolved around the CENVAT Credit of service tax for input services received at a windmill site generating electricity away from the factory premises. The appellant's Chartered Accountant argued that the services at the windmill site were for electricity generation consumed by them through the Gujarat Electricity Board. Additionally, the appellant highlighted the limitation period issue, claiming the demand was time-barred based on the period of credit availed.

2. The respondent's argument, represented by the ld. SDR, referenced a Division Bench decision in the case of Ajanta Ltd vs CCE Rajkot, following the precedent set by the judgment in the case of Rajhans Metal Pvt. Ltd. The respondent contended that the credit of input services at windmill sites was not eligible for CENVAT Credit. The Tribunal noted the conflicting decisions and the pending judgment of Rajhans Metal Pvt. Ltd. before the High Court of Gujarat, emphasizing that the limitation issue required a detailed examination at the final disposal of the appeal.

3. After considering both sides' submissions, the Tribunal found that the issue appeared to be covered by the Division Bench's decision in Rajhans Metal Pvt. Ltd. However, due to the pending status of the judgment before the High Court and the complexity of the limitation issue, the Tribunal concluded that the appellant had not established a prima facie case for a complete waiver of the pre-deposit amount. Consequently, the Tribunal directed the appellant to deposit the entire confirmed CENVAT Credit amount within eight weeks and report compliance by a specified date. Upon compliance, the application for waiver of interest and penalties was granted, with recovery stayed until the appeal's final disposal.

In conclusion, the judgment emphasized the need for a detailed examination of the limitation issue and the pending status of relevant judgments before granting a complete waiver of pre-deposit. The decision highlighted the importance of compliance with deposit requirements while allowing for a stay on the recovery of interest and penalties pending the appeal's final resolution.