2013 (2) TMI 159 - AT - Service Tax

Waiver of Pre-deposit - Information Technology services - Erection and Commissioning - Management, Maintenance or Repair - Rule 15(4) of the CENVAT Credit Rules, 2004 read with Section 78 of the Finance Act, 1994 - Appellant is a manufacturer/trader of laptops and supply different software Held that - Out of total demand of Rs. 25.77 crores, about Rs.13.14 crores stands appropriated in the impugned order. The appellants have paid service tax while importing Information Technology Software services and while rendering the said services to the customers in India, they have paid service tax under the same category. Similarly, it is claimed that the appellants have taken credit of service tax paid by the subcontractors under the category of Management, Maintenance or Repair service and utilised the credit while executing their annual maintenance contract the their customers. Learned CA submits that they have paid more service tax on these categories than what they have taken as credit. Therefore, we prima facie, agree that substantial part of the balance of the demand may not be sustainable. Direct the appellants to deposit a sum of Rs. 62 Lakhs.

Summary

Issues:
1. Credit availed on services like "Information Technology services," "Erection and Commissioning," and "Management, Maintenance or Repair."
2. Demand confirmed by the Commissioner along with interest and penalty under CENVAT Credit Rules, 2004.
3. Eligibility for credit under Rule 6(5) of CENVAT Credit Rules, 2004.
4. Appropriate payment made by the appellant and balance due.
5. Prima facie sustainability of the remaining demand.

Analysis:

1. The appellant, engaged in the trade of laptops, software, and related services, avails credit on various services like "Information Technology services," "Erection and Commissioning," and "Management, Maintenance or Repair." They pay service tax on imported software services and locally received services, taking credit for the same. The appellant also claims credit on services like advertising agency, inbound/outbound freight, etc.

2. The Commissioner confirmed a demand of Rs.25,77,02,690/- for the period April 2008 - March 2009, along with interest and imposed a penalty under Rule 15(4) of the CENVAT Credit Rules, 2004. The appellant contested the demand, stating that a significant portion of the demand has already been paid by them.

3. The appellant's Chartered Accountant argued that out of the total demand, a substantial amount has been paid by either reversing CENVAT credit or through cash payments. They claim eligibility for credit under Rule 6(5) of CENVAT Credit Rules, 2004 for services like "Management, Maintenance or Repair service," "Security Service," and "Erection, Commissioning and Installation services."

4. The Commissioner's representative reiterated the findings and reasoning behind the demand. The appellant's CA contended that they have paid more service tax on certain categories than the credit availed, suggesting that a significant portion of the remaining balance may not be sustainable.

5. After considering both sides, the Tribunal found that a substantial part of the balance demand may not be sustainable, given the service tax payments made by the appellant. They directed the appellant to deposit a specific sum within a specified timeline, with a waiver of pre-deposit for the remaining dues pending the appeal's disposal.