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2014 (11) TMI 504 - AT - Service TaxWaiver of pre deposit - CENVAT Credit - Trading activity - Held that - Bench in the case of Lacto Cosmetics (Vapi) Pvt.Ltd Vs CCE Daman 2012 (12) TMI 642 - CESTAT AHMEDABAD and Gulf Oil Corpn. Ltd. Vs CCE Vapi 2012 (8) TMI 45 - CESTAT, AHMEDABAD has held that credit with respect to services availed in trading activities is not admissible. High Court of Gujarat in the case of Lally Automobiles Pvt.Ltd Vs Commissioner (Adjudication) Central Excise 2013 (10) TMI 863 - DELHI HIGH COURT has also ordered for a pre-deposit in one such case. appellant has not made out a, prima facie, case for complete waiver of the confirmed demand - Partial stay granted.
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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