2014 (3) TMI 350 - AT - Central Excise

Waiver of pre-deposit of input service credit - Manpower Recruitment Agency Services - Held that - in this case appellant has taken the credit on the strength of duty paid invoice of service received by them which is not in dispute. Further if this Tribunal decides in favour of the revenue that the job worker is required to pay service tax then also the appellant is entitled to take input service credit. In these circumstances appellant has made out a case for 100% waiver of pre-deposit. Accordingly I waive the requirement of pre-deposit of the impugned demands - Matter remitted back - Decided in favour of assessee.

Summary

Issues:
Waiver of pre-deposit of input service credit based on invoices from job worker under Manpower Recruitment Agency Services.

Analysis:
The appellant, a manufacturer of excisable goods, availed CENVAT credit on inputs and capital goods. The job worker, upon investigation, was found to provide services falling under Manpower Recruitment Agency Services, paying service tax and issuing invoices to the appellant, who took credit accordingly. A show-cause notice was issued to the job worker, with the demand being set aside by the Commissioner (Appeals) based on the job worker's qualification under the mentioned service. Subsequently, a notice was issued to the appellant for denial of input service credit due to the job worker not being required to pay service tax. The appellant's appeal against the confirmed demands was dismissed for non-compliance with Section 35, leading to the current appeal seeking waiver of pre-deposit.

The Tribunal noted that the appellant had indeed taken credit based on duty-paid invoices for services received, a fact not in dispute. Even if the Tribunal decides in favor of the revenue regarding the job worker's service tax liability, the appellant would still be entitled to the input service credit. Consequently, the Tribunal granted 100% waiver of the pre-deposit requirement, acknowledging the appellant's case. The impugned order was found to lack merit, leading to its setting aside, and the matter was remanded back to the Commissioner (Appeals) for a decision on merits without insisting on any pre-deposit. The appeal and stay application were disposed of accordingly.

This judgment highlights the importance of considering the nature of services provided by suppliers when claiming input service credit, as well as the significance of compliance with procedural requirements to avoid dismissal of appeals. The Tribunal's decision to waive the pre-deposit requirement emphasizes the need for a fair assessment of the appellant's case and the consideration of all relevant factors in such matters.