2014 (1) TMI 1423 - AT - Service Tax

Waiver of predeposit of cenvat credit - Denial of cenvat credit - Credit is taken at wrong office - Service provider did not issue the invoices within 14 days of providing the service - Held that - The equipments were received by BSNL and used by BSNL. Whether the credit is taken at wrong office, can be examined during appeal hearing. Also in the matter of construction services the case appears to be one of delay in issuing invoice rather than non-payment of tax. These matters appear to be procedural in nature which will be looked into at the time of hearing appeal. At this stage we consider it proper to grant waiver of pre-deposit of dues arising from the impugned order for admission of appeal - Stay granted.

Summary

Issues:
Request for waiver of predeposit of cenvat credit denied on various grounds including delayed issuance of invoices, lack of proof of payment, use of inter office memos instead of actual invoices, and non-payment of service tax for cell phone services.

Analysis:
1. The denial of cenvat credit was based on several grounds, such as the service provider not issuing invoices within the prescribed time frame, lack of evidence of payment by specific entities, and the use of inter office memos instead of actual invoices. The impugned order highlighted these issues, particularly emphasizing the delay in invoice issuance as a major concern. The question of whether the Revenue had concrete evidence to challenge the payments by the service provider was raised, indicating a potential lack of clarity in the case.

2. The applicant's counsel argued that construction companies eventually paid the tax, albeit belatedly. The focus was on the delay in raising invoices rather than non-payment of tax. The order suggested that any discrepancies regarding the office where credit was taken or procedural matters could be addressed during the appeal hearing. Consequently, the Tribunal found it appropriate to grant a waiver of pre-deposit for the disputed amount and imposed a stay on the collection of dues pending the appeal process.

3. Regarding credit based on inter office debit memos, the applicant provided copies of invoices received by the Executive Engineer of BSNL Salem to support the issuance of such memos. It was also clarified that the equipment in question was utilized for specific services provided by the Salem office. The Tribunal, after considering the arguments presented by the Revenue, did not identify any significant revenue loss and deemed the procedural issues raised as matters to be addressed during the appeal proceedings.

In conclusion, the Tribunal granted the waiver of pre-deposit for the disputed cenvat credit amount and ordered a stay on the collection of dues during the pendency of the appeal, emphasizing that procedural and jurisdictional concerns could be examined in detail at the appeal hearing.