2013 (11) TMI 606 - AT - Service Tax

Stay application - Classification of service - catering service or credit card operations - Agreement with IRCTC for rendering services - Availment of CENVAT Credit - Held that - In regard to Cenvat credit availed in respect of the petitioner s operations with IRCTC, the agreement between the petitioner and the IRCTC clearly reveals that petitioner and IRCTC had entered into a co-branding agreement in respect of the credit card agency service provided by the petitioner, for use in catering service and other operations of the IRCTC. Such association did not prima facie transform the services received by the petitioner from IRCTC into catering service - Case prima facie in favour of assessee - Stay granted.

Summary

Issues: Delay in filing appeal, Waiver of pre-deposit and stay of proceedings

Delay in filing appeal:
The judgment addresses the condonation of a 28-day delay in filing the appeal. The reasons for the delay were explained, detailing the organizational process within the appellant's structure that led to the delay. Despite the complex explanation, the delay was condoned on the condition that the appellant remits Rs.10,000 to the Revenue within four weeks. The court considered the substantial reasons provided and granted the condonation.

Waiver of pre-deposit and stay of proceedings:
The appeal sought waiver of pre-deposit and stay of further proceedings following an adjudication order by the Commissioner of Central Excise. The dispute arose from the appellant's alleged irregular availment of Cenvat credit related to its credit card operations. The appellant contended that all input services were legitimately used for its taxable credit card agency service. Reference was made to a Tribunal decision emphasizing that no one-to-one correlation between input and output services is necessary for availing Cenvat credit. The court found the appellant's case arguable, especially regarding its operations with the Indian Railway Catering and Tourism Corporation (IRCTC). The association with IRCTC did not automatically convert services received into catering services. Consequently, the court waived the pre-deposit requirement and stayed further proceedings pending the appeal's disposal.

This judgment showcases the court's consideration of procedural delays and substantive legal arguments regarding the appellant's Cenvat credit availment. The decision to condone the delay and grant the waiver of pre-deposit and stay of proceedings reflects a balanced approach to addressing the issues raised in the appeal.