2013 (8) TMI 50 - AT - Service Tax

Waiver of pre-deposit - Cenvat credit of the service tax paid on canteen services, air travel agency services and air agent services Held that - First appellate authority in order to hear and dispose the appeal had directed them to deposit 25% of the amount held as ineligible cenvat credit and penalties which have been complied with - Prima facie, the cenvat credit availed by the appellant on canteen services and air travel agency services cannot be denied as it has been stated by the appellant as being used in the activity of business they are conducting i.e. manufacturing and clearing of the final product Amounts already deposited by the appellant can be considered as enough deposit to hear and dispose the appeal as the issue, prima-facie, seems to be covered by various decisions Appeal for waiver of pre-deposit allowed Decided in favor of Assessee.

Summary

Issues:
Waiver of pre-deposit of ineligible cenvat credit, interest, and penalty confirmed by lower authorities.

Analysis:
The judgment pertains to a stay petition filed for the waiver of pre-deposit of an amount confirmed as ineligible cenvat credit availed by the appellant, along with interest and an equivalent amount of penalty. The appellant had already deposited 25% of the disputed amount and penalty as directed by the first appellate authority for hearing and disposing of the appeal. The counsel argued that the cenvat credit on services like canteen services, air travel agency services, and air agent services should not be denied, as they are crucial for the appellant's business activities, which include manufacturing and clearing of the final product. The counsel cited various Tribunal decisions supporting their stance and requested an early hearing due to the favorable precedents.

The judge, after considering the submissions, acknowledged that the appellant had complied with the deposit requirements set by the first appellate authority. The judge opined that the cenvat credit on canteen services and air travel agency services should not be denied, as they were integral to the appellant's business operations. Notably, the judge concurred with the counsel's argument citing various decisions supporting the allowance of such credits. Consequently, the judge found the deposited amounts to be sufficient for the appeal's hearing and disposal, given the prima facie merit in the appellant's favor. Therefore, the application for the waiver of pre-deposit of the remaining amounts was granted, and the recovery of the said amounts was stayed until the appeal's final resolution.

Furthermore, at the counsel's request, the matter was scheduled for final disposal on a specified date, allowing for a comprehensive resolution of the issues raised in the appeal. The judgment, delivered by Mr. M.V. Ravindran, focused on the crucial aspect of cenvat credit eligibility and the necessity of pre-deposit waiver, ensuring a fair and just adjudication process for the appellant.