2014 (1) TMI 959 - AT - Central Excise

Denial of cenvat credit Services claimed as input services Waiver of Pre-deposit - Revenue was of the view that no integral connection was established by the assessee to claim CENVAT credit on any of the services vis-a-vis their business of manufacture and clearance of excisable products Held that - the question as to whether an integral connection between the business of manufacture and clearance of excisable goods and each of the services claimed to be input services needs elaborate consideration, which can be had only at the final hearing stage - the entire demand is within the normal period of limitation Thus, the appellant directed to deposit 10% of the total amount of CENVAT credit 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 and stay of recovery regarding denied CENVAT credit
- Penalty imposition of Rs. 25 lakhs

Waiver of Pre-Deposit and Stay of Recovery Regarding Denied CENVAT Credit:
The appellant sought waiver of pre-deposit and stay of recovery in relation to CENVAT credit of over Rs. 26.78 crores denied by the adjudicating authority for the period from November 2009 to October 2011. The department's case was based on the lack of an integral connection between the appellant's business of manufacture and clearance of excisable goods and the services claimed as input services. The appellant argued that the services were covered under the definition of 'input service' as per Rule 2(l) of the CENVAT Credit Rules 2004 and cited supporting judgments, including the case of CCE Vs. Ultratech Cement Ltd. The appellant categorized the services and presented 33 judgments in support of their claim. The Tribunal acknowledged the need for detailed consideration of the connection between the business activities and the claimed input services at the final hearing stage. Given that the demand fell within the normal limitation period and the appellant did not cite financial hardships, the Tribunal directed the appellant to pre-deposit 10% of the total denied CENVAT credit within 6 weeks for waiver and stay of the penalty and the remaining amount of CENVAT credit with interest.

Penalty Imposition of Rs. 25 Lakhs:
In addition to the denied CENVAT credit, a penalty of Rs. 25 lakhs was imposed on the appellant. However, subject to the appellant's compliance with the pre-deposit requirement within the specified timeline, the Tribunal granted waiver and stay in relation to the penalty imposed. The appellant was instructed to report compliance to the Deputy Registrar by a specified date, and upon due compliance, the waiver and stay would be applicable concerning the penalty and the balance amount of denied CENVAT credit along with interest. This decision was pronounced and dictated in open court, ensuring transparency and adherence to the legal process.

This comprehensive analysis of the judgment highlights the key issues of waiver of pre-deposit and stay of recovery regarding denied CENVAT credit and the penalty imposition of Rs. 25 lakhs, providing a detailed insight into the Tribunal's decision-making process and considerations.