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2013 (11) TMI 1459 - AT - Service TaxUtilization of Services Waiver of Pre-deposit - Whether the services have been used in or in relation to the manufacture of their finished goods at their factory or otherwise Held that - The burden lies on the Assessee to maintain proper records - Prima facie, the Applicant have failed to discharge the burden - the Applicant had not registered themselves as an input service distributor Thus, Prima facie, it is difficult to extend the CENVAT Credit of input service invoices in the name of their Branch Office Relying upon B.S.N.L. vs. CCE, Jamshedpur 2013 (11) TMI 1261 - CESTAT KOLKATA - the Applicant have failed to make out a prima facie case in their favour for total waiver of dues Applicant directed to deposit 10% of the CENVAT Credit as pre-deposit upon such submission rest of the duty to be waived till the disposal Partial stay granted.
Issues:
1. Waiver of predeposit of CENVAT Credit and penalties. 2. Admissibility of CENVAT Credit on input services. 3. Burden of proof on the Assessee. 4. Failure to register as an 'input service distributor'. 5. Financial hardship and revenue interest in granting waivers. Analysis: Issue 1: Waiver of predeposit of CENVAT Credit and penalties The Appellate Tribunal dealt with two applications seeking waiver of predeposit of CENVAT Credit and penalties. The amounts in question were significant, totaling Rs.5.97 crore and Rs.53.17 lakh in the respective appeals. The Tribunal had to determine whether to grant a waiver of these amounts based on the arguments presented by both parties. Issue 2: Admissibility of CENVAT Credit on input services The Applicant claimed CENVAT Credit on input services used in the manufacture of finished products at their factory. The dispute arose as the invoices were raised in the name of their branch office in Kolkata, while payments were made from the factory office. The Revenue argued that since services were not directly related to the factory in Kolkata, the CENVAT Credit should be denied. The Tribunal emphasized the need for proper records to establish the link between the services and the manufacturing process. Issue 3: Burden of proof on the Assessee The Tribunal noted that the burden of proof lies with the Assessee to demonstrate that the services claimed for CENVAT Credit were indeed used in or in relation to the manufacture of finished goods at their factory. In this case, the Tribunal found that the Applicant failed to discharge this burden adequately, especially since they had not registered as an 'input service distributor'. Issue 4: Failure to register as an 'input service distributor' The Revenue highlighted that the Applicant had not availed the facility of registering as an 'input service distributor', which complicated the extension of CENVAT Credit benefits to them. This failure to register impacted the Tribunal's decision regarding the admissibility of the claimed CENVAT Credit on input services. Issue 5: Financial hardship and revenue interest in granting waivers Considering the financial hardship expressed by the Applicant and the interest of revenue, the Tribunal decided to require a 10% deposit of the CENVAT Credit amounts within a specified timeframe. Failure to comply would result in the dismissal of the Appeals. The Tribunal cited legal precedents and its earlier decisions to support this directive, emphasizing the balance between financial considerations and legal obligations. In conclusion, the Tribunal's judgment focused on the proper utilization of CENVAT Credit, burden of proof, registration requirements, financial considerations, and legal precedents to determine the waiver of predeposit in the appeals before them.
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