2013 (11) TMI 715 - AT - Service Tax

Eligibility of Cenvat credit - Service tax paid on rental premises Waiver of Pre-deposit - Held that - Residential premises is being also used for holding conferences and meetings and also used by director for residential purpose - whether residential premises used by the director can be considered in relation to business has to dealt at the time of disposal of the appeal Prima facie the appellant has not made out a case for complete waiver of pre-deposit appellant is directed to submit Rupees Fifty Thousands as pre-deposit Upon such submission rest of the duty to be waived till the disposal Partial stay granted.

Summary

Issues Involved:
Eligibility of CENVAT Credit on Service Tax paid for rental premises used by director for residential purposes.

Analysis:

1. Eligibility of CENVAT Credit:
The case involved a Stay Petition seeking waiver of pre-deposit of an amount confirmed by lower authorities as ineligible CENVAT Credit for Service Tax paid on rental premises used by the director for residential purposes. The Tribunal noted that the residential premises were also used for holding conferences and meetings, raising the question of whether such premises could be considered in relation to business activities. The Tribunal emphasized the need for a thorough examination to determine if the director's use of the premises had any connection to the manufacturing activity of the appellant.

2. Decision on Pre-Deposit:
After considering the submissions from both sides, the Tribunal concluded that the appellant had not established a case for a complete waiver of the pre-deposit amount. As a result, the Tribunal directed the appellant to pre-deposit Rs.50,000 within four weeks and report compliance before a specified date. Upon compliance, the Tribunal allowed the application for waiver of the remaining amounts involved and stayed the recovery until the appeal's disposal, subject to the reported compliance.

3. Procedural Directions:
The Tribunal set specific timelines for compliance, instructing the appellant to pre-deposit the designated amount within four weeks and report back to the Deputy Registrar by a specified date. The Tribunal outlined the subsequent steps, including the placement of the file before the Bench for further orders based on compliance verification. The decision on the waiver of pre-deposit for the balance amounts was contingent upon the reported compliance with the initial directive.

In conclusion, the judgment addressed the issue of eligibility of CENVAT Credit for Service Tax paid on rental premises used by the director for residential purposes, emphasizing the need for a comprehensive assessment to determine the connection to business activities. The Tribunal's decision on pre-deposit and procedural directions provided a structured approach to handling the appeal process, ensuring compliance and subsequent consideration of the waiver request for the remaining amounts involved.