2015 (12) TMI 151 - AT - Service Tax

Waiver of pre deposit - Cenvat credit - input services had not been rendered in the factory premises and used in or in relation to the manufacture of the finished goods - Held that - Input services received by various RSOs and the Head Office are undisputedly used outside the factory premises of the Applicant Company, but in or in relation to the business activities of the Applicant Company. Prima facie, we find that the applicant had availed the Cenvat credit on the invoices issued by their RSOs/Head Office, which were registered as Input Service Distributors under the relevant Rules. Also, in our opinion, it is not necessary that the back-up invoices should be enclosed along with the invoices issued by the Input Service Distributors so as to make the applicant eligible to avail the Cenvat credit on such invoices of the input service distributors. In the result, the applicant could be able to make out a case for waiver of the dues adjudged. Accordingly, pre-deposit of all dues adjudged is waived and its recovery stayed during the pendency of the appeal. - Stay granted.

Summary

Issues: Application for waiver of pre-deposit of Service Tax and penalty under Cenvat Credit Rules, 2004

Analysis:
- The application sought waiver of pre-deposit of Service Tax and penalty under Cenvat Credit Rules, 2004 amounting to Rs. 35,10,779 and Rs. 36.00 lakh respectively.
- The appellant contended that the Cenvat credit availed on invoices issued by their Head Office/Regional Sales Office (RSOs) was denied as the input services were not used in or in relation to the manufacture of finished goods in the factory premises.
- The appellant argued that Rule 2(1) of the Cenvat Credit Rules did not impose a condition for input services to be used in or in relation to the manufacture of finished goods.
- The denial of Cenvat credit was also based on the lack of enclosed back-up invoices with the invoices issued by the input service distributors.
- The Revenue, represented by the ld. Assistant Commissioner, supported the findings of the Commissioner (Appeals).
- The Tribunal found that the input services received by the RSOs and Head Office were used outside the factory premises but in or in relation to the business activities of the Applicant Company.
- It was observed that the applicant had availed Cenvat credit on invoices issued by their RSOs/Head Office, registered as Input Service Distributors.
- The Tribunal opined that there was no requirement for back-up invoices to be enclosed with invoices from Input Service Distributors to avail Cenvat credit.
- Consequently, the Tribunal granted waiver of the dues adjudged, allowing pre-deposit of all dues to be waived and recovery stayed during the appeal process.

This detailed analysis covers the issues involved in the application for waiver of pre-deposit of Service Tax and penalty under the Cenvat Credit Rules, 2004, providing a comprehensive understanding of the arguments presented and the Tribunal's decision.