2014 (5) TMI 33 - AT - Service Tax

Waiver of pre-deposit - Whether the Cenvat credit could be availed in respect of inputs received prior to registration - Held that - We are prima facie not persuaded with the petitioner s claim for immunity under Section 73 (3) of the Act - Conditional stay granted.

Summary

Issues:
1. Waiver of pre-deposit and stay of further proceedings sought.
2. Claim for immunity under Section 73 (3) of the Finance Act, 1994.
3. Availment of Cenvat credit in respect of inputs received prior to registration.

Analysis:

Issue 1:
The petitioner sought waiver of pre-deposit and stay of further proceedings following an adjudication order dated 30.09.2012. The petitioner, a registered company providing Business Auxiliary Service (BAS), had not obtained registration as a Service Tax provider for a significant period despite providing taxable services. Upon registration in June 2009, the Revenue discovered income receipt for taxable services within BAS. The petitioner self-assessed and discharged a portion of the tax liability in September 2009. However, the authority rejected the claim for immunity under Section 73 (3) of the Act, leading to disallowance of Cenvat credit and imposition of penalties and interest.

Issue 2:
The authority rejected the petitioner's claim for immunity under Section 73 (3) of the Finance Act, 1994, citing contravention of Act provisions with intent to evade tax liability. The adjudication order disallowed Cenvat credit on inputs received before registration and imposed penalties under Sections 76, 77, and 78 of the Act. The Tribunal was not convinced with the petitioner's claim for immunity, directing a partial deposit of Rs. Two crores and twenty lakhs within eight weeks as a condition for waiver of pre-deposit and stay of recovery proceedings.

Issue 3:
The question of whether Cenvat credit could be availed for inputs received before registration was highlighted for consideration at the final appeal hearing. The Tribunal was not initially persuaded by the petitioner's claim for immunity under Section 73 (3) of the Act. The order directed a specific deposit amount and set a deadline for compliance, warning of immediate dissolution of the stay in case of default, leading to rejection of the appeal for failure to pre-deposit.

This comprehensive analysis of the judgment delves into the issues of waiver of pre-deposit, immunity under Section 73 (3) of the Finance Act, 1994, and the availment of Cenvat credit for inputs received before registration, providing a detailed insight into the Tribunal's decision and directives.