2013 (11) TMI 797 - AT - Service Tax

Eligibility to avail cenvat credit of the proportionate service tax after 10.09.04 - Service tax paid by insurance companies - Waiver of pre-deposit Held that - Cenvat credit availed by a manufacturer on an invoice of service tax provider issued prior to 10.09.04 - The issue is a debatable one - the appellant has reversed the amount of cenvat credit taken by them and are contesting the issue on merits - the amount can be considered as enough deposit to hear and dispose the appeal - Application for the waiver of the pre-deposit of the balance amounts allowed till the disposal Stay granted.

Summary

Issues:
- Eligibility to avail cenvat credit of proportionate service tax after 10.09.04 by a manufacturer on an invoice of service tax provider issued prior to 10.09.04.

Analysis:
The judgment delivered by Mr. M.V. Ravindran at the Appellate Tribunal CESTAT AHMEDABAD pertains to a stay petition filed by the appellant seeking the waiver of pre-deposit of penalty and interest imposed by lower authorities. The appellant, a manufacturer, had availed cenvat credit of service tax paid by insurance companies. The contention put forth was that the appellant was permitted to avail such credit from 10.09.04 onwards. However, upon audit, it was discovered that the appellant had claimed credit for service tax paid before the permissible date based on invoices predating the eligibility period. The appellant argued that they had only availed the proportionate credit of service tax paid or payable on documents issued after 10.09.04. The appellant had already reversed the entire amount of credit and was challenging the issue on its merits.

Upon reviewing the submissions made by the ld. D.R. and examining the records, Mr. M.V. Ravindran found that the crux of the matter revolved around the eligibility of a manufacturer to claim cenvat credit for proportionate service tax post 10.09.04 on invoices issued by service tax providers before the specified date. Acknowledging the debatable nature of the issue and considering that the appellant had already reversed the credit amount in question while continuing to contest the matter on its substantive grounds, it was deemed that the reversed amount sufficed as a deposit to proceed with the appeal. Consequently, the application for waiving the pre-deposit of the remaining amounts was granted, and any recovery was stayed pending the final disposal of the appeal. The judgment was dictated and pronounced in the court by the presiding officer.