2014 (2) TMI 1038 - AT - Service Tax

Stay application - Commercial coaching and training service - Recovery of Credit - Imposition of interest and penalty - Held that - use catering service, photography service, service of repair and maintenance of the motor vehicles and renting of halls and travelling expenses is not disputed. I am of prima facie view that all these services have nexus with the appellant s activity of providing commercial coaching and training and, as such, the same appear to be covered by the definition of input service as given in Rule 2 (l) of the Cenvat Credit Rules. In view of this, the requirement of pre-deposit of Cenvat credit demand, interest and penalty is waived for hearing of the appeal and the recovery thereof is stayed till the disposal of the appeal - Stay granted.

Summary

Issues:
1. Interpretation of the definition of 'input service' under Cenvat Credit Rules.
2. Validity of availing Cenvat credit for services like catering, photography, renting of immovable property, and repair of motor vehicles.
3. Application of penalties under Rule 15 of Cenvat Credit Rules.
4. Invocation of extended period for Cenvat credit demand.

Analysis:
The case involves a dispute regarding the eligibility of Cenvat credit for various services utilized by an entity providing commercial coaching and training. The appellant availed Cenvat credit for services like catering, photography, renting of immovable property, and repair of motor vehicles, which the department contended were not covered under the definition of 'input service.' The Deputy Commissioner confirmed the Cenvat credit demand along with penalties, leading to an appeal to the Commissioner (Appeals) where the penalty was reduced. The appellant then filed an appeal against this order, seeking a stay on recovery pending appeal.

During the hearing, the appellant's counsel argued that the services in question were essential for their business activities and relied on relevant judgments to support their claim. The departmental representative opposed the stay application, citing the applicability of a Supreme Court judgment and the correct invocation of the extended period for the demand.

Upon careful consideration, the judge found that the services in question had a nexus with the appellant's business of providing coaching and training, thus falling within the definition of 'input service' under the Cenvat Credit Rules. As a result, the judge waived the requirement of pre-deposit for the Cenvat credit demand, interest, and penalty, allowing a stay on recovery until the appeal's disposal. The stay application was granted, and the decision was pronounced in open court.