2012 (12) TMI 28 - AT - Service Tax

CENVAT credit on services provided to the job-workers at the job-worker s premises - Held that - As the applicant has not disclosed the nature of services availed by the job-worker before the lower authorities it is difficult to conclude about the eligibility of the services to the input service tax credit. The applicant is unable to make out a prima facie case in their favour, thus directed to pre-deposit of Rs.40,000/- within six weeks from today - against assessee.

Summary

Issues:
1. Waiver of pre-deposit of duty and penalty.
2. Eligibility for CENVAT credit on service tax paid for services provided to job-workers at their premises.

Analysis:
1. The applicant sought waiver of pre-deposit of duty and penalty amounting to Rs.1,78,606/- each, confirmed by lower authorities. The primary issue revolved around the eligibility of the applicant for CENVAT credit concerning service tax paid on services provided to job-workers at their premises.

2. The advocate for the applicant argued that the services were used indirectly in the manufacture of final products, referencing a precedent where input credit on duty paid on inputs received by job-workers was allowed. The advocate contended that the same rationale should apply to input services used by job-workers.

3. The Revenue's representative contended that the applicant failed to provide a list of services availed by job-workers, leading the lower authorities to invoke the suppression clause for imposing penalties. It was argued that the precedent cited by the applicant was specific to inputs and did not extend to input service tax credit.

4. The Tribunal noted that the lower authorities had indeed highlighted the lack of disclosure regarding the nature of services availed by job-workers. Due to this non-disclosure, it was challenging to ascertain the eligibility of services for input service tax credit. Consequently, the Tribunal ruled that the applicant failed to establish a prima facie case, ordering a pre-deposit of Rs.40,000/- within six weeks, with a stay on recovery of the remaining dues pending appeal disposal.

5. The judgment emphasized the importance of disclosing the nature of services availed by job-workers to determine eligibility for input service tax credit. The Tribunal's decision underscored the necessity for transparency in availing such credits and the consequences of non-disclosure on the applicant's case.

6. The compliance deadline for the pre-deposit was set for 12/11/2012, ensuring a clear timeline for the fulfillment of the Tribunal's order. This judgment serves as a reminder of the significance of providing complete and accurate information in tax-related matters to avoid adverse implications on the applicant's position.