2017 (10) TMI 1228 - AT - Service Tax

Waiver of pre-deposit - reversal of CENVAT credit - Held that - the appellant to make predeposit of ₹ 45 lakhs (Rupees forty five lakhs only) (approximately 10% of the demand) within one month and report compliance on 03/10/2017 - Subject to due compliance, there will be waiver of predeposit of balance dues and recovery thereof is stayed till the disposal of appeal.

Summary

Issues: Stay application for deposit of excess credit under Rule 14 of CENVAT Credit Rules, 2004 without separate accounts for taxable and exempted services.

Analysis:
1. The judgment pertains to a stay application where the appellants were directed to deposit an amount of ?4,52,63,024/-, representing excess credit utilized during a specific period under Rule 14 of the CENVAT Credit Rules, 2004. The demand was confirmed due to the lack of separate accounts for input services used in both taxable and exempted services.

2. The appellant contended that they maintained separate accounts, citing a dropped demand for a subsequent period where the Commissioner acknowledged the separate accounts. The appellant also referred to previous orders by the Tribunal directing a 10% predeposit of confirmed demands for the same issue in earlier periods.

3. The learned AR argued that the appellant should be held accountable for violating the rules, emphasizing the importance of compliance.

4. Considering the past directives by the Tribunal for the same appellant in similar situations, the Tribunal directed the appellant to make a predeposit of ?45 lakhs (approximately 10% of the demand) within a month. The waiver of predeposit for the balance dues was subject to compliance, and recovery was stayed pending the appeal's disposal. The operative part of the order was pronounced in open court on 31/08/2017.