2013 (10) TMI 1008 - AT - Service Tax

CENVAT credit - Business Auxiliary Services and Business Exhibition Service - Held that - appellant being service recipient discharging the service tax liability as service provider, he is to be treated as service provider and he can discharge the service tax liability by utilising the credit available. Prima-facie, we find that the issue seems to be covered by the judgment of the Hon ble High Court of Karnataka 2011 (9) TMI 852 - KARNATAKA HIGH COURT . Accordingly, we are of the view that appellant has made out a prima-facie case for the waiver of pre-deposit of the amounts involved. Applications for the waiver of pre-deposit of amounts involved are allowed and recovery thereof stayed till the disposal of appeals - stay granted.

Summary

Issues: Stay petitions for waiver of pre-deposit of amounts confirmed by authorities, eligibility of cenvat credit for service tax liability under reverse charge mechanism.

Analysis:
The judgment pertains to two stay petitions seeking the waiver of pre-deposit of amounts confirmed by the adjudicating authority and upheld by the first appellate authority, along with interest and penalties. The demand arose due to the appellant's ineligible availing of cenvat credit for discharging service tax liability on Business Auxiliary Services and Business Exhibition Service, which are subject to payment by the assessee under the reverse charge mechanism as per Section 66A of the Finance Act, 1994.

Upon hearing both sides and examining the record, the Tribunal noted that the Revenue's objection to confirming the demand on the appellant was based on the utilization of cenvat credit for discharging service tax liability under Section 66A of the Finance Act, 1994. The Tribunal referred to the judgment of the Hon'ble High Court of Karnataka in the case of Commissioner of Service Tax, Bangalore vs. Arvind Fashions Limited 2011-TIOL-748-HC-KAR-ST. In this judgment, it was held that when a service recipient discharges the service tax liability as a service provider, they should be treated as a service provider and can utilize the available credit for discharging the service tax liability.

Based on the precedent set by the High Court of Karnataka, the Tribunal found that the appellant had established a prima facie case for the waiver of pre-deposit of the amounts involved. Consequently, the applications for the waiver of pre-deposit were allowed, and the recovery thereof was stayed until the disposal of the appeals. The judgment was dictated and pronounced in court by Mr. M.V. Ravindaran.