2014 (11) TMI 329 - AT - Central Excise

CENVAT Credit - Scope of input services - Business Auxiliary Service - availment of credit on input services by Associate Enterprises - Held that - Appellant availed credit based on documents issued by M/s Grind Well Norton Ltd. only and the necessary details required are available therein. It is not the case of the department that the appellant has not paid service tax at all. It is also not the case of the department that the appellant has not received service or utilized the same. Further, it is also seen that on the very same issue for a different period, the Commissioner (Appeals) had allowed the benefit and the department had filed an appeal. In this case, the credit availed is during the period from September 2008 to April 2010 and the show-cause notice was issued on 7.9.2010. Therefore, substantial portion of the demand is also time-barred. this is a fit case for granting waiver of pre-deposit. - stay granted.

Summary

Issues Involved:
Disputed input service credit with interest and penalty under Central Excise Act, 1944 and CENVAT Credit Rules, 2004 for the period from September 2008 to April 2010.

Analysis:

Issue 1 - Disputed Input Service Credit:
The case involves a disputed input service credit of Rs. 12,70,670 for the period from September 2008 to April 2010, along with interest and penalty under relevant provisions. The Appellant had earlier succeeded in a similar appeal for a different period, where the Commissioner had allowed the benefit, leading to a subsequent appeal by the department. The Appellant's factory, situated in the same compound as M/s Grind Well Norton Ltd, availed various services from them, including factory administration, canteen, housekeeping, security, transport, water supply, telephone, and other administrative services. The definition of 'Business Auxiliary Service' was crucial in this context, particularly regarding the procurement of goods or services as inputs for the client. The Appellant stressed that the Service Tax liability was discharged by M/s Grind Well Norton Ltd, as per relevant circulars and explanations. The total Service Tax amount involved was detailed, emphasizing the payment made and shared services provided.

Issue 2 - Legal Considerations and Pre-Deposit Waiver:
The Tribunal considered the submissions made by both parties, noting that the Appellant had availed credit based on documents from M/s Grind Well Norton Ltd, with all necessary details available. It was highlighted that there was no dispute regarding the payment of service tax by the Appellant or the utilization of services received. The Tribunal also pointed out that a significant portion of the demand was time-barred, given the period in question and the issuance date of the show-cause notice. Considering these factors, the Tribunal found it appropriate to grant a waiver of pre-deposit, allowing a stay against recovery for 180 days from the date of the order.

In conclusion, the Tribunal's decision in this case revolved around granting a waiver of pre-deposit based on the specific circumstances and legal considerations presented. The analysis delved into the intricacies of the disputed input service credit, the relevant legal provisions, and the timeline of events leading to the Tribunal's decision to grant the stay against recovery for a specified period.