2014 (4) TMI 601 - AT - Central Excise

Waiver of pre deposit - Availment of CENVAT credit benefit - Held that - Prima facie, we take note of the fact there are conflicting views by an adjudicating authority at Commissioner level and an appellate authority at Commissioner level. We also see force in the argument that many of the services would come within the meaning of the definition input services . Therefore, we consider it proper to grant waiver of dues arising from the impugned order for admission of appeal and it is ordered accordingly - Stay granted.

Issues:
1. Disputed CENVAT credit on certain input services.
2. Interpretation of the definition of 'input services.'
3. Conflicting views by different officers of the Department.

Analysis:

Issue 1: Disputed CENVAT credit on certain input services
The appellant, a manufacturer paying excise duty and availing CENVAT credit benefit, had taken CENVAT credit on specific input services during a period from April 2010 to November 2011. The Revenue contended that some services lacked a sufficient nexus with the manufacturing activity, leading to a show-cause notice and a demand confirmation of Rs.79,58,637. The consultant for the appellant provided a breakdown of the services in question, including banking and financial services, clearing and forwarding services, and information technology services, arguing for the eligibility of credit based on the definition of 'input services' and citing previous favorable decisions by the Commissioner (Appeals).

Issue 2: Interpretation of the definition of 'input services'
The consultant for the appellant highlighted that the definition of 'input services' at Rule 2(l) explicitly encompasses services related to financing, supporting the claim for credit on banking and financial services. Regarding information technology services, it was argued that they were essential for software maintenance crucial for business operations, including manufacturing. The Revenue's position was that only 'financial' services were covered under the definition, excluding charges for services like demand drafts, loan processing, and cheque processing. Additionally, the Revenue argued against credit for clearing and forwarding agent services beyond the place of removal.

Issue 3: Conflicting views by different officers of the Department
The Tribunal acknowledged conflicting views between the adjudicating authority at the Commissioner level and the appellate authority at the same level. Recognizing the potential applicability of many services within the definition of 'input services,' the Tribunal granted a waiver of dues arising from the disputed order for the admission of appeal. Consequently, a stay on the collection of such dues was ordered during the pendency of the appeal, considering the presence of conflicting interpretations within the Department.

In conclusion, the Tribunal's decision granted temporary relief to the appellant by waiving the dues and providing a stay on collection, pending the appeal process, due to the conflicting views within the Department and the plausible applicability of the disputed services under the definition of 'input services.'

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