2014 (2) TMI 334 - AT - Service Tax

Cenvat credit on Courier agency service Waiver of Pre-deposit - Held that - Following COMMISSIONER OF CENTRAL EXCISE, AHMEDABAD II Versus M/s CADILA HEALTHCARE LTD. 2013 (1) TMI 304 - GUJARAT HIGH COURT - held in favour of the assessee up to 01.04.2008. Post 01.04.2008, the appellant could have entertained a bonafide belief that they are entitled for the credit after 01.04.2008 also, as they are availing CENVAT Credit on the Service Tax paid for the period up to 01.04.2008 - the appellant has made out a prima facie case for the waiver of pre-deposit of the amounts Pre-deposits waived till the disposal Stay granted.

Summary

Issues:
Waiver of pre-deposit of duty, eligibility to avail CENVAT Credit on Service Tax paid by courier agency, applicability of High Court judgment, limitation period for demand.

Analysis:
The judgment by the Appellate Tribunal CESTAT Ahmedabad pertains to a Stay Petition seeking waiver of pre-deposit of duty amounting to Rs.6,62,680/- along with interest and penalties imposed. The lower authorities had confirmed and upheld these amounts due to the appellant's alleged ineligibility to avail CENVAT Credit on Service Tax paid by a courier agency.

The appellant argued that the issue of CENVAT Credit on Service Tax paid by courier agencies had been settled by the Hon'ble High Court of Gujarat in a previous case. The appellant contended that post 01.04.2008, they were entitled to the credit, as they had a genuine belief based on their prior availment of CENVAT Credit up to that date. The show cause notice for demand was issued on 28.10.2010, and the appellant claimed that the demand should be barred by limitation.

After considering the submissions from both sides, the Tribunal acknowledged the High Court's decision in favor of the assessee up to 01.04.2008. The Tribunal noted that post that date, the appellant could have reasonably believed they were entitled to the credit. Consequently, the Tribunal found that the appellant had established a prima facie case for the waiver of pre-deposit. As a result, the application for waiver of pre-deposit was allowed, and the recovery of the amounts was stayed pending the appeal's disposal.

In conclusion, the Tribunal granted the appellant's request for waiver of pre-deposit based on the interpretation of the High Court judgment, the appellant's bonafide belief post 01.04.2008, and the question of limitation for the demand raised in the show cause notice. The judgment showcases the importance of legal precedents, the interpretation of statutory provisions, and the application of principles of natural justice in tax matters before the appellate authorities.