2015 (12) TMI 277 - AT - Service Tax

Waiver of pre deposit - Eligibility of cenvat credit - Held that - credit on input services alleged to have been used in one factory, but utilized at another factory, which rests on appreciation of evidences and also interpretation of various provisions of law, which would be considered at the time of final disposal of appeals. Keeping in view the interest of Revenue and also in the interest of justice, it would be appropriate to direct the Applicant No.(i) to deposit ₹ 47.00 lakhs. - Partial stay granted.

Summary

Issues: Waiver of predeposit of Cenvat Credit and penalty under Section 11AC of the Central Excise Act, 1944 and Rule 15 of the Cenvat Credit Rules, 2004.

Analysis:
The judgment revolves around the applications seeking waiver of predeposit of Cenvat Credit and penalties imposed on the applicants under relevant sections of the Central Excise Act and Cenvat Credit Rules. The dispute arises from the utilization of input services at one manufacturing unit and its availing at another unit. The appellant argues that there is no prohibition on availing Cenvat Credit on input services used in one unit for another unit. On the other hand, the Department contends that since both units have separate registrations and are assessed independently for excise duty, availing Cenvat Credit in such a manner is impermissible under the Cenvat Credit Rules, 2004.

The Tribunal, after hearing both parties, observes that the issue pertains to the eligibility of Cenvat Credit on input services used in one factory but utilized at another factory. The Tribunal notes that this matter involves the interpretation of various legal provisions and the evaluation of evidence, which will be considered during the final disposal of the appeals. In the interest of justice and revenue, the Tribunal directs the Applicant No.(i) to deposit a specific amount within a stipulated period. Upon compliance with the deposit requirement, the balance dues against Applicant No.(i) and all dues against Applicant No.(ii) & Applicant No.(iii) would be waived, and the recovery of these dues would be stayed during the pendency of the appeals. However, failure to make the required deposit would lead to the dismissal of the appeals without further notice. The stay petitions are disposed of accordingly.

In conclusion, the judgment addresses the crucial issue of Cenvat Credit eligibility concerning the utilization of input services across different manufacturing units. The Tribunal emphasizes the importance of complying with the directed deposit to avoid dismissal of the appeals and underscores the need for a thorough examination of evidence and legal provisions in the final disposal of the case.