2015 (2) TMI 880 - AT - Central Excise

Waiver of pre deposit - CENVAT Credit - Imposition of equivalent penalty u/s 11AC - Business Support Service - Held that - Prima facie, in as much as, M/s. ABMCPL is a separate legal entity and cannot be considered as an extended arm of the applicant like Head office or Branch office. In the result, the applicant could able to make out a prima facie case for waiver of pre-deposit of dues adjudged. Consequently, all dues adjudged is waived and its recovery stayed during the pendency of the appeal - Stay granted.

Summary

Issues:
1. Waiver of pre-deposit of CENVAT Credit and penalty under Rule 15 (2) of CENVAT Credit Rules read with Section 11AC of CEA, 1944.

Analysis:
The case involved an application seeking the waiver of pre-deposit of CENVAT Credit amounting to Rs. 1.99 Crores and an equal penalty imposed under Rule 15 (2) of CENVAT Credit Rules along with Section 11AC of CEA, 1944. The appellant had availed CENVAT Credit based on invoices issued by M/s. Aditya Birla Management Corpn. Pvt. Ltd. (M/s. ABMCPL) for input services received, specifically Business Support Services. The appellant argued that M/s. ABMCPL, being an independent legal entity, was not required to register as an input service distributor since it was neither the Head Office nor Registered office of the appellant. The appellant contended that since M/s. ABMCPL had borne expenditures on behalf of the appellant for various services and paid service tax under different categories, the CENVAT Credit should not be denied.

The Revenue, represented by the Ld. A.R., supported the findings of the Ld. Commissioner, arguing that M/s. ABMCPL acted as a distributor of service tax paid and should have been registered as an input service distributor. They highlighted that M/s. ABMCPL issued invoices consolidating various services received by the appellant under the common head of 'Business Support services,' which the appellant used to avail CENVAT Credit.

The Tribunal, after considering the arguments, found no merit in the Revenue's contention. It held that M/s. ABMCPL, being a separate legal entity, could not be considered an extended arm of the appellant like a Head office or Branch office. Consequently, the Tribunal ruled in favor of the appellant, granting a prima facie case for the waiver of pre-deposit of the dues adjudged. As a result, all dues adjudged were waived, and the recovery was stayed during the pendency of the appeal. The operative part of the order was pronounced in the court, concluding the judgment.