2014 (2) TMI 573 - AT - Service Tax

Denial of Cenvat credit on input service - Courier service, rent-a-cab service, mandapam service and catering service Waiver of Pre-deposit Held that - Following Hero Honda Motors Ltd. Vs. CCE 2011 (7) TMI 240 - CESTAT, NEW DELHI - the applicants failed to produce any evidence to establish that the freight charges were not included in the assessable value - there is factual dispute in this case - the applicants failed to make out a prima facie case for waiver of the amount Assessee directed to deposit Rupees ten lakhs as pre-deposit upon such submission rest of the duty to be stayed till the disposal Partial stay granted.

Summary

Issues:
- Application for waiver of predeposit of duty of Rs.35,05,976/- along with interest and penalty.
- Denial of CENVAT credit on input services including courier service, rent-a-cab service, mandapam service, and catering service.
- Applicability of decisions by Larger Bench of the Tribunal and High Court on similar issues.
- Failure to produce evidence regarding inclusion of freight charges in the assessable value.

Analysis:
1. The applicant sought waiver of predeposit of duty amounting to Rs.35,05,976/- along with interest and penalty. The denial of CENVAT credit on input services such as courier service, rent-a-cab service, mandapam service, and catering service was the primary issue at hand. The applicant relied on the decision of the Larger Bench of the Tribunal in ABB Ltd. Vs. CCE -2009 (15) STR 23, upheld by the Hon'ble Karnataka High Court, to support their case. The major portion of the disputed amount was attributed to courier service, amounting to Rs. 29,56,060/-, while other services were also contested.

2. The learned AR for the respondent referenced the case of Hero Honda Motors Ltd. Vs. CCE-2011 (274) ELT 89 where a similar issue was partially decided in favor of the appellant. The respondent argued that the applicant failed to provide evidence demonstrating that freight charges were not included in the assessable value. The AR reiterated the findings of the lower authorities on the issues of rent-a-cab service, mandapam service, and catering services. The factual dispute regarding the inclusion of freight charges raised concerns about the prima facie case for waiver of the entire duty amount along with interest and penalty.

3. Following the arguments from both sides, the Tribunal noted the decision in the case of Hero Honda Motors where a partial stay was granted. The lack of evidence presented by the applicants regarding the exclusion of freight charges from the assessable value created a factual dispute. Consequently, the Tribunal directed the applicant to predeposit Rs. 10,00,000/- within six weeks, with the balance amount's predeposit waived upon compliance. The recovery of the remaining amount was stayed pending the appeal's disposal, highlighting the importance of factual evidence in establishing a prima facie case for waiver.