2013 (1) TMI 403 - AT - Service Tax

Waiver of pre-deposit - Denial of CENVAT credit - on furniture and fittings under Chapter 96 - service tax paid on canteen services - Circular dated 29.04.2011 - Held that - During the relevant period the furniture classifiable is not covered under the definition of capital goods and as the canteen service is not free to the employee, therefore, we find that the applicants have not made out a case for total waiver of pre-deposit. Direct to deposit pre-deposit

Summary

Issues:
1. Waiver of pre-deposit of service tax, interest, and penalties.
2. Denial of credit for furniture and fittings.
3. Denial of credit for service tax paid on canteen services.

Analysis:
1. The appellant sought a waiver of pre-deposit of service tax, interest, and penalties amounting to Rs.3,41,17,361. The demand was confirmed due to the denial of credit for furniture, fittings, and service tax paid on canteen services. The appellant argued that the definition of input during the disputed period included goods used for providing output services. They relied on a Board's Circular stating that furniture and stationary used within a factory for manufacturing business are eligible for credit. The appellant claimed that as a provider of general insurance services, furniture and fittings were essential for providing taxable services.

2. Regarding the denial of credit for furniture and fittings, the Revenue contended that the Board's Circular was not applicable to the case as it postdated the disputed period. They argued that furniture classified under Heading 96 of the Tariff did not qualify as capital goods during the relevant period. The Tribunal found that the furniture in question was not covered under the definition of capital goods at that time. Therefore, the Tribunal directed the appellant to deposit Rs.15.00 lakhs within eight weeks, with the remaining dues' pre-deposit waived and recovery stayed during the appeal.

3. Concerning the denial of credit for service tax paid on canteen services, the appellant admitted that they were not providing free food to employees. The Revenue argued that since the canteen services were charged to employees, the credit was inadmissible. The Tribunal held that since the canteen services were not provided free of charge to employees, the appellant failed to establish grounds for a total waiver of pre-deposit. As a result, the Tribunal ordered the partial deposit mentioned above and stayed recovery pending the appeal.

This comprehensive analysis of the judgment highlights the key issues involved, the arguments presented by both parties, and the Tribunal's reasoning leading to the decision on each issue.