2014 (1) TMI 578 - AT - Central Excise

Invoices issued in the name of head office No distribution of service as Input Service Distributor Waiver of pre-deposit Held that - The services for which the invoices are raised, are the services mostly received in the manufacturing unit and where the credit has been raised and that they have made the payments of such services from the factory account - if the services are received at the factory where the credit is raised and payment is made, mentioning of head office in the service provider s invoice, being a rectifiable mistake, which can be pardoned Following Valco Industries Ltd. Versus CCE 2012 (12) TMI 30 - CESTAT, New Delhi - Prima facie, the appellant has made out a strong prima facie case for the waiver of pre-deposit of amounts stay granted.

Summary

Issues:
Waiver of pre-deposit of duty amount, interest, and penalty due to ineligible Cenvat credit on invoices issued in the name of the head office without distribution as Input Service Distributor.

Analysis:
The appellant filed a stay petition seeking waiver of pre-deposit of duty amount, interest, and penalty totaling Rs. 19,91,307/- and Rs. 2,00,000/- respectively, which were confirmed by lower authorities as ineligible Cenvat credit due to invoices issued in the name of the head office without proper distribution. The Tribunal noted that the invoices from service providers were indeed in the name of the head office, but the appellant consistently argued that services were mainly received at the manufacturing unit where payments were made from the factory account. Lower authorities failed to consider this crucial point in favor of the appellant. The Tribunal found this to be a rectifiable mistake, especially if services were received at the factory where credit was claimed and payments were made. Citing precedents like Ahmednagar Forgings Limited and Valco Industries Limited, the Tribunal concluded that the appellant had a strong prima facie case for the waiver of pre-deposit.

The Tribunal allowed the applications for the waiver of pre-deposit of the amounts involved, including duty, interest, and penalty, and ordered the stay of recovery until the appeals were disposed of. This decision was based on the understanding that the appellant had presented a compelling case supported by relevant arguments and legal precedents. The Tribunal's ruling was grounded in the principle that rectifiable mistakes, such as the misrepresentation of the head office in service provider invoices, should not hinder the appellant's right to seek a waiver of pre-deposit. By referencing previous judgments and considering the specific circumstances of the case, the Tribunal granted the appellant relief from the pre-deposit requirements, ensuring a fair and just outcome in line with established legal principles and precedents.