2010 (1) TMI 338 - AT - Service Tax

Stay- The issue involved is regarding reversal of Cenvat credit on account of 8% of the value of the exempted services rendered by the appellant to the Special Economic Zone (SEZ) units. The contention of the Revenue is that since these services are exempted by Notification No. 4/2004 dated 31-3-2004, the appellants having provided dutiable as well as exempted services are liable to pay an amount equal to 8% of the value of the services. Held that- services rendered to SEZ unit by DTA unit treated as export of service. prima facie case made out. Recovery of more than Rs. 8 crore stayed.

Summary

Issues Involved:
Waiver of pre-deposit of Service Tax, Interest, and Penalty amounts due to reversal of Cenvat credit on exempted services provided to Special Economic Zone (SEZ) units.

Analysis:
The issue at hand pertains to the reversal of Cenvat credit on exempted services provided to SEZ units. The Revenue argues that the appellant, who provided both dutiable and exempted services, must pay an amount equal to 8% of the value of the exempted services as per Notification No. 4/2004. The appellant's counsel referred to earlier stay orders for the same assessee, highlighting similar situations where unconditional stays were granted by the Tribunal. The Tribunal noted that the issue in the present cases aligns with the previous stay orders and that services rendered to SEZ units by Domestic Tariff Area (DTA) units are treated as exports under the SEZ Act, 2005. Considering this, the Tribunal found that the appellant established a prima facie case for the waiver of pre-deposit. Consequently, the applications for waiver were allowed, and recovery was stayed until the appeals' disposal. As the cases share a common issue, the registry was instructed to list them together for disposal.

This judgment showcases the Tribunal's approach to granting waivers of pre-deposit in cases involving the reversal of Cenvat credit on exempted services provided to SEZ units. The decision was influenced by the treatment of services to SEZ units as exports under the SEZ Act, 2005, and the alignment of the current issue with previous stay orders for the same assessee. The Tribunal's analysis focused on establishing a prima facie case for the waiver, leading to the allowance of the applications and the stay of recovery pending appeal disposal. The directive to list all related appeals together for disposal indicates a systematic approach to handling cases with common issues, ensuring efficient resolution and consistency in decisions.