2014 (8) TMI 550 - AT - Service Tax

Waiver of pre deposit - Denial of CENVAT Credit - credit availed on the basis of the advice notes issued by their Corporate Head Office located in Delhi, along with the invoices of service provider - Head Office was not registered under ISD - Held that - There is no dispute about the input service received by the appellant and admissibility of the credit. The only objection raised by the Revenue is procedural and too technical. The denial of the credit on the ground of Head Office not being registered with the Service Tax Department should not be adopted as one of the reasons for denial of the credit. We also find that a strong prima facie case in favour the appellant. - Stay granted.

Summary

Issues:
1. Denial of Modvat credit and penalty imposition.
2. Availment of credit based on advice notes from unregistered Head Office.
3. Procedural requirement of ISD registration.
4. Bar on limitation for raising demand.
5. Pre-deposit of duty and penalty waiver.

Analysis:
1. The judgment addresses the issue of denial of Modvat credit and imposition of penalty amounting to Rs. 1,22,27,236 against the appellant. The credit was denied due to availing it based on advice notes from their Corporate Head Office, which was unregistered under ISD. The Tribunal found that the denial solely on the grounds of Head Office registration was improper and too technical, as the input services received were undisputed and credit admissible.

2. The appellant argued that the procedural requirement of ISD registration should not apply to them as they are the sole manufacturing unit. They highlighted that the Head Office was subsequently registered with the service tax department, removing any dispute. The appellant also contended that the demand raised on 8-1-2010 was time-barred, citing precedents from earlier Tribunal cases.

3. The Tribunal acknowledged the appellant's arguments, emphasizing that the denial of credit based on the Head Office's registration status was not a valid reason. They noted a strong prima facie case in favor of the appellant and waived the pre-deposit of duty and penalty, allowing the stay application in the appellant's favor. The judgment concluded with the order being dictated and pronounced in open court, providing relief to the appellant by waiving the pre-deposit requirement.