2014 (1) TMI 963 - AT - Central Excise

Denial of credit on input service distributed Waiver of Pre-deposit Held that - The applicant did not produce all the documents before the adjudicating authority - There is no force in the submission of the learned counsel that there is no dispute regarding the authenticity of documents which have been received and accounted for in the books of accounts by the applicant - the applicants failed to make out a prima facie case for waiver of pre-deposit of the entire amount of tax and penalty - the applicant is directed to deposit a sum of Rupees one crore as pre-deposit upon such submission rest of the duty to be stayed till the disposal Partial stay granted.

Summary

Issues:
1. Application for waiver of predeposit of tax, interest, and penalty.
2. Application for waiver of penalty imposed under CENVAT Credit Rules, 2004.

Analysis:

Issue 1: Application for waiver of predeposit of tax, interest, and penalty

The applicant sought waiver of predeposit of tax amounting to Rs.6,22,34,090/- along with interest and penalty. The tax demand was for the period July 2007 to September 2009, with significant amounts being disputed. The Tribunal noted that a major portion of the credit was deemed ineligible due to discrepancies in the distribution of input service challans and invoices. The applicant's contention was that while there were technical infractions, the documents were genuine, and the services were duly recorded in their books. However, the Tribunal found that the applicant failed to provide sufficient evidence to support the utilization of the credit of input services. Consequently, the Tribunal directed the applicant to deposit a sum of Rs.1,00,00,000/- within six weeks and report compliance by a specified date. Upon this deposit, the predeposit of the remaining dues was waived, and recovery stayed pending the appeal's disposal.

Issue 2: Application for waiver of penalty under CENVAT Credit Rules, 2004

In addition to the tax predeposit, the applicant also sought waiver of a penalty of Rs.10,000/- imposed on M/s. Chemplast Sanmar Ltd. under the CENVAT Credit Rules, 2004. The Tribunal considered the arguments presented by both sides. The learned Additional Commissioner reiterated the findings of the Commissioner, emphasizing the applicant's failure to produce adequate evidence supporting the credit utilization of input services. The Tribunal concurred with the Additional Commissioner, noting that not all relevant documents were submitted before the adjudicating authority. As a result, the Tribunal found that the applicant did not establish a prima facie case for the complete waiver of predeposit of tax and penalty. Therefore, the Tribunal directed the applicant to make the specified deposit and granted relief only upon compliance with this directive.

This judgment highlights the importance of providing comprehensive evidence to support claims for waiver of predeposit in tax matters. The Tribunal's decision underscores the need for parties to substantiate their positions with relevant documentation to establish a strong case for relief.