2013 (7) TMI 834 - AT - Central Excise

Stay application Waiver of Pre-deposit Cenvat Credit on service tax paid on the different services which are used in the construction and maintenance of their township which is situated within the factory premises Appellant deposited an amount of Rs.2.80 crores against confirmed demand of Rs.9.62 crores; amount of deposit which has been made by the appellant works out to approximately 25% of the confirmed demand - Held that - The facts of the case of ITC Ltd. where in High Court of Andhra Pradesh has upheld the order of the tribunal are more akin to the case in hand, at the same time, judgment of the Hon ble High Court of Bombay in the case of Ultratech Cement taking a different view in respect of specific services rendered at the residential complex - When there are different views on the very same issue, there is convention, that stay on pre deposits needs to be granted if facts are akin, and the facts in this case, are akin to the facts of the case wherein Hon ble High Court of Andhra Pradesh has decided the issue - Issue is arguable one and there is claim of financial hardship - Amount deposited by the appellant during proceeding before the lower authorities as enough deposit to hear and dispose the appeal. Accordingly, applications for the waiver of pre deposit of the balance amounts involved are allowed Decided in favor of Assessee.

Summary

Issues: Stay petitions for waiver of pre-deposit of Cenvat Credit, Penalty, and Interest; Eligibility of Cenvat Credit on service tax paid on services used in construction and maintenance of township within factory premises; Interpretation of conflicting High Court judgments; Financial hardship faced by the appellant.

The judgment addresses stay petitions filed by the appellant seeking waiver of pre-deposit of amounts related to Cenvat Credit, Penalty, and Interest. The Adjudicating Authority had confirmed demands citing the appellant's availing of ineligible Cenvat Credit on service tax paid for services used in constructing and maintaining a township within the factory premises. The appellant argued that including the township cost in the product's production cost was in line with cost accounting standards. They referred to conflicting High Court judgments, with one supporting their stance and another ruling against it. The appellant highlighted severe financial hardship due to a significant deposit already made. The Departmental Representative contended that service tax on services used in a residential colony might not be eligible for Cenvat Credit based on functional utility and relevant considerations. They referenced other judgments emphasizing mandatory services for credit eligibility. The appellant also cited a CBEC circular supporting their position that goods used in the factory premises should qualify for duty credit. The Tribunal noted the debatable nature of the issue, with different High Courts holding contrasting views on similar matters. They acknowledged the appellant's argument about the residential complex being within the factory premises, a point not previously raised in other judicial forums. Considering the conflicting views and the appellant's financial situation, the Tribunal allowed the waiver of pre-deposit for the remaining balance, as a substantial amount had already been deposited, amounting to approximately 25% of the confirmed demand. The recovery of the balance amounts was stayed pending the appeal's disposal.