2013 (12) TMI 1081 - AT - Central Excise

Assessee not registered as input service distributor Invoices raised and the services used at different units - Waiver of Pre-deposit Held that - Prima-facie, the cenvat credit has not been availed correctly as per the procedure laid down under the Cenvat Credit Rules, 2004 - the applicant directed to deposit Rupees thirteen lakhs as pre-deposit upon such submission rest of the duty to be stayed till the disposal Partial stay granted.

Summary

Issues:
- Waiver of pre-deposit of duty and penalty under Rule 15 (3) of the Central Excise Rules, 2004 read with Section 11AC of the Central Excise Act, 1944.

Analysis:
The appellant sought a waiver of pre-deposit of duty amounting to Rs.3,53,87,779/- and a penalty of Rs.2,000/- imposed by the Commissioner. The appellant's representative argued that a significant portion of the amount pertained to cenvat credit availed on invoices in favor of the Head Office but used at different units, which were not registered as an 'input service distributor.' The appellant offered to deposit Rs.13.00 lakhs out of the total amount. The Department's representative contended that the appellant did not follow the prescribed procedures for availing cenvat credit. The Tribunal noted that the Head Office was not registered as an 'input service distributor,' leading to incorrect availing of cenvat credit. Despite acknowledging the merger of units, the Tribunal directed the appellant to deposit Rs.13.00 lakhs within eight weeks and report compliance. Upon deposit, the remaining dues would be waived, and recovery stayed during the appeal. Failure to comply would result in appeal dismissal without further notice.

This judgment primarily dealt with the correct availing of cenvat credit under the Cenvat Credit Rules, 2004. The Tribunal emphasized the necessity for the Head Office to be registered as an 'input service distributor' when invoices are raised in its favor but services are used at different units. Failure to follow the prescribed procedures led to the incorrect availing of cenvat credit, warranting the directive for a deposit to rectify the situation. The judgment balanced the interests of revenue and the appellant by allowing a partial deposit to waive the remaining dues, ensuring compliance with the rules while providing relief during the appeal process.