2015 (3) TMI 559 - AT - Service Tax

Waiver of pre deposit - Denial of CENVAT Credit - rent-a-cab service - input service credit cannot be taken onservices which were used for providing non-taxable services - Held that - In view of the decision in the case of Apotex Research Pvt. Ltd. 2015 (3) TMI 346 - CESTAT BANGALORE , I am of the prima facie view that the issue decided therein squarely applies to the facts and circumstances of the case of the present appellant. Accordingly, I am of the considered view that the appellant has made out a case for complete waiver of pre-deposit of the adjudged dues. Therefore, the requirement of pre-deposit is waived and stay against recovery is granted during the pendency of appeal. - Stay granted.

Summary

Issues:
1. Availing CENVAT credit on input services used for providing non-taxable services.
2. Applicability of Tribunal's decision in Apotex Research Pvt. Ltd. case.
3. Waiver of pre-deposit and stay against recovery during appeal.

Analysis:
1. The appellant availed CENVAT credit on rent-a-cab services for software development, which were not taxable services. The service tax demand was confirmed, stating that credit cannot be taken on services used for non-taxable activities. The appellant argued that the issue is covered by the Tribunal's decision in Apotex Research Pvt. Ltd. case. The Revenue also agreed that the issue is covered by the mentioned decision.

2. The judge, S K Mohanty, reviewed the records and found that the decision in the Apotex Research Pvt. Ltd. case is applicable to the present appellant's circumstances. Referring to the judgment in Apotex case, it was observed that the appellant has a prima facie case for complete waiver of pre-deposit of the dues. Consequently, the judge granted a stay against recovery during the appeal process.

3. The operative part of the order, granting the waiver of pre-deposit and stay against recovery, was pronounced in open court on October 31, 2014. The decision was based on the Tribunal's precedent and the circumstances of the appellant's case, ensuring fairness and adherence to legal principles in the matter of CENVAT credit on non-taxable services used for software development.