2013 (11) TMI 436 - AT - Central Excise

Cenvat credit - Input Service Distributor Waiver of Pre-deposit - Whether credit taken by their Doddaballapur unit is admissible or not Revenue was of the view that assessee being not registered as Input Service Distributor are not entitled to CENVAT credit in respect of invoices pertaining to period prior to their obtaining registration - Held that - Following Beico Industries Ltd. vs. CCE, Nasik 2012 (4) TMI 311 - CESTAT, MUMBAI - Under the rule 7 of CENVAT credit rules there is no bar denying the credit in respect of the invoices of the period prior to date of the registration requirement of pre-deposit for hearing of the appeal is waived till the disposal Stay granted.

Summary

Issues:
Admissibility of credit taken by manufacturing unit in Doddaballapur; Challenge against penalties imposed on two appellants; Denial of credit taken by Head Office prior to registration as 'input service distributor'.

Analysis:
The case revolves around the admissibility of credit taken by a manufacturing unit in Doddaballapur, with the primary issue being whether the credit is permissible. Initially, a show-cause notice was issued to the unit, questioning the entitlement to credit due to the Head Office engaging in both manufacturing and trading activities. However, this notice was not acted upon. Subsequently, another show-cause notice was issued based on the premise that credit could not have been availed since the Head Office was not registered as an 'input service distributor'. The appellants contested this, having lost the case before the Commissioner (A), leading them to appeal before the tribunal. Additionally, two other appellants challenged penalties imposed on them. Another related appeal involved the denial of credit taken by the Head Office before registration as an 'input service distributor', encompassing the amount in the initial appeal.

The advocate for the appellants relied on a precedent set by the Tribunal in the case of Beico Industries Ltd. vs. CCE, Nasik, where it was held that credit can be taken and distributed before obtaining registration. Based on this precedent, the advocate requested the waiver of pre-deposit and stay on the adjudged dues and penalties.

Upon reviewing the submissions from both parties and the cited precedent, the tribunal found that the issue at hand aligns with the decision in the Beico Industries Ltd. case. Consequently, the tribunal decided to waive the pre-deposit and grant a stay against the adjudged dues and penalties for all the appellants involved in the stay applications and appeals before them.