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2014 (11) TMI 504 - AT - Service Tax


Issues:
Admissibility of CENVAT Credit on trading activities.

Analysis:
The appellant filed a stay application concerning an order confirming a demand of Rs. 68,01,423 against them, mainly disallowing credit on trading activities as it was considered an exempted service. The appellant relied on a CESTAT decision stating that trading activity does not constitute an exempted service. The appellant argued that a partial amount had already been paid, which should be considered for granting a stay on the remaining amounts. On the other hand, the Revenue contended that various CESTAT cases have consistently held that credit for trading activities is not admissible, citing specific cases where deposits were requested or appeals favored the Revenue.

Upon hearing both sides and examining the case records, the Bench noted conflicting views among different CESTAT Benches on the admissibility of CENVAT Credit for trading activities. Previous decisions by the Bench and the High Court indicated that credit for services in trading activities is not permissible. The Bench acknowledged the contentious nature of the issues raised and concluded that a thorough consideration could only be made during a regular hearing.

Consequently, the appellant did not establish a prima facie case for a complete waiver of the confirmed demand. The Bench ordered the appellant to make a further pre-deposit of Rs. 5 lakhs within eight weeks, in addition to the amount already paid, and report compliance for further orders. A stay on the recovery of the remaining amounts was granted pending the appeal's disposal, subject to the payment of the specified amount. The decision was pronounced in court on 22.09/2014.

 

 

 

 

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