2014 (10) TMI 82 - AT - Central Excise

Waiver of predeposit of tax - Cenvat Credit - input services - Management, Maintenance & Repair Service of helicopter and Management Consultancy Service - Held that - Applicant availed credit on Management Consultancy Services based on the fact that Shri Sankar, Group Chairman of the Company was providing Management Consultancy Services to the applicant and raised invoices for the services rendered and service tax was paid on those services by the applicant unit and service was rendered to other units also. Hence on this issue, the applicant is failed to make prima facie case for waiver of entire amount of tax. - stay granted partly.

Summary

Issues:
Application for waiver of predeposit of tax on various input services for the period 2007-08 to 2009-10.

Analysis:
The applicant filed an application seeking waiver of predeposit of tax amounting to Rs. 42,45,840/- along with interest and penalty for the period 2007-08 to 2009-10. The issue revolved around the denial of Cenvat credit on input services including Management, Maintenance & Repair Service of helicopter, Rent-a-Cab and contract bus services, and Management Consultancy Service. The Tribunal had previously waived predeposit on Management, Maintenance & Repair Service of helicopter and Management Consultancy Service but directed predeposit on Rent-a-Cab and contract bus services.

In the case of Management, Maintenance & Repair Service of helicopter, the Ld. Advocate argued that the helicopter was an essential asset for the appellant's business activity and service tax was paid whenever it was used by the Group Company. The Tribunal observed that maintaining such assets was part of the business and the investment in the helicopter was necessary for the business activity, thus finding merit in the submission.

Regarding the denial of credit on Management Consultancy Service, the Tribunal noted that there was evidence of the service being rendered to the appellant by the Group Chairman, and service tax was paid on the invoices raised for the services. However, on the issue of Rent-a-Cab and contract bus services, the Ld. Advocate did not contest the denial seriously, considering the earlier stay order.

Ultimately, the Tribunal directed the applicant to make a pre-deposit of Rs. 12,00,000/- within eight weeks. Upon compliance with this directive, the predeposit of the remaining tax amount along with interest and penalty would be waived until the appeal's disposal, and the recovery stayed accordingly. The compliance deadline was set for 12.08.2014.