2013 (11) TMI 714 - AT - Service Tax

Cenvat credit of service tax - Job worker paid under Business Auxiliary Services Waiver of Pre-deposit Held that - Prima facie, the denial of credit to the appellant would be incorrect as if the amount is paid to the consolidated fund of India as Service Tax liability - No show cause notice has been issued to the job worker holding that the amount paid by him would not amount to Service Tax - In the absence of any action at the job worker s end, Prima facie the CENVAT Credit sought to be denied is incorrect - The appellant has made out a case for waiver of pre-deposit of the amounts involved stay granted.

Summary

Issues:
- Appeal for waiver of pre-deposit of amount confirmed as ineligible CENVAT Credit, interest, and penalty under CENVAT Credit Rules, 2004.

Analysis:
The judgment pertains to a Stay Petition filed seeking the waiver of pre-deposit of confirmed ineligible CENVAT Credit, interest, and penalty imposed under the CENVAT Credit Rules, 2004. The primary issue revolves around the denial of CENVAT Credit to the appellant by revenue authorities. The authorities contended that the appellant availed CENVAT Credit of Service Tax paid by a job worker under Business Auxiliary Services category, suggesting that the job worker was eligible for exemption under Notification No.8/2005-ST. However, upon review of the records, it was established that the job worker had indeed discharged the Service Tax liability, was registered with the Department, and had issued invoices to the appellant who had paid the consideration for the same. The crucial question raised was whether the appellant could be denied CENVAT Credit under these circumstances. The judge, after careful consideration, opined that denying credit to the appellant would be incorrect. The judge highlighted that the job worker's compliance with Service Tax provisions, registration, and invoicing, coupled with the absence of any adverse action against the job worker, indicated that the denial of CENVAT Credit to the appellant was prima facie incorrect.

Furthermore, the judge emphasized that since the Service Tax amount was paid to the consolidated fund of India and no show cause notice had been issued to the job worker challenging the nature of the payment, the appellant had a valid case for the waiver of pre-deposit. Consequently, the judge allowed the application for the waiver of pre-deposit of the amounts involved and stayed the recovery until the appeal's final disposal. This decision was made to ensure fairness and justice in the matter, considering the facts and legal provisions at hand.