2012 (11) TMI 786 - AT - Service Tax

Waiver of pre-deposit - Denial of CENVAT credit on the ground that the services are not used in or in relation to manufacturing activity Held that - Services in relation to Convention services, Memberships of Clubs & Association Services, Health Club & Fitness Centre Services and House Keeping services are not entitled for input service credit - applicants are directed to make a pre-deposit

Summary

Issues:
Denial of CENVAT credit on various services not used in or in relation to manufacturing activity.

Analysis:

1. Real Estate Agency Service, Authorised Agency Service, Event Management Service, Outdoor Caterer Service, Rent-a Cab Operator Scheme Service, Service for survey and exploration of Mines, Videotape Production Service, Construction Service, Mandap Keeper's Service, Photography Services, Pandal and Shamiana Services, Cable Operator Services, Tour Operator Services, Convention Services, Memberships of Clubs and Association Services, Air Travel Agents Services, Facility Management Services, Program Producer Services, Post Services, Survey and Map Making Services:
The CENVAT credit on these services has been denied based on the argument that they are not used in or in relation to the manufacturing activity, thus not covered under Rule 3(1) of the CENVAT Credit Rules, 2004. The judge examined the records and concluded that Convention services, Memberships of Clubs & Association Services, Health Club & Fitness Centre Services, and House Keeping services are not eligible for input service credit. However, for the other services, it was held that they are entitled to take input service credit, as per the decision in the case of CCE v. Ultratech Cement Ltd. The applicants were directed to make a pre-deposit of input service credit availed on the four ineligible services within a specified timeline, with the provision that compliance would result in the waiver of the balance of dues adjudged against them, and recovery stayed during the appeal process.

2. Compliance and Pre-deposit:
The judgment specified a deadline for the applicants to make a pre-deposit of the input service credit availed on the four services deemed ineligible. The compliance deadline was set, and failure to meet this requirement would result in the continuation of the recovery process for the balance of dues adjudged against the applicant.

3. Stay of Recovery:
During the pendency of the appeal process, the judgment ordered the stay of recovery of the balance of dues adjudged against the applicant, contingent upon the timely pre-deposit of the input service credit availed on the four services considered ineligible for CENVAT credit.

In conclusion, the judgment addressed the denial of CENVAT credit on specific services not related to manufacturing activities, outlined the services deemed ineligible for input service credit, mandated a pre-deposit for certain services, and provided provisions for waiver of balance dues and stay of recovery during the appeal process based on compliance.