2010 (2) TMI 359 - AT - Service Tax

Stay- the demand stands confirmed on the ground that the appellants were providing taxable service namely banking and other financial services as well as exempted services such as bill discounting facility, financial services for financing of vehicles and foreclosure charges which were exempted services and since the assessees were not maintaining separate accounts as required in terms of Rule 6(2) of the Cenvat Credit Rules, 2004, their eligibility to credit was restricted to 20% of the amount of the service tax payable, as per Rule 6(3)(c) of the above Rules. Held that- the assessees are not rendering any exempted service so as to come within the purview of Rule 6(2) and Rule 6(3)(c) of the 2004 Rules. Therefore, waive pre-deposit and stay recovery of the amounts in question during the pendency of this appeal.

Summary

The Appellate Tribunal CESTAT, Chennai heard an application for waiver of pre-deposit of service tax of Rs. 1,41,97,346/- along with penalty. The demand was confirmed due to the appellants providing both taxable and exempted services without maintaining separate accounts as required. However, the Tribunal found that the appellants were not rendering any exempted service, thus waiving the pre-deposit and staying the recovery during the appeal.