2018 (9) TMI 755 - AT - Service Tax

Stay on operation of an order - CENVAT Credit - The stay petition reveals that appellant department has a strong case in its favour and unless order-in-original allowing the appeal setting aside the duty demand etc. is stayed, there will be revenue loss to the government - Held that - It is observed that cenvat credit availed by the respondent/OP was held to be inadmissible and duty demand as made, was confirmed by the first adjudicating authority with ancillary relief but the same was set aside by the Commissioner (Appeals) holding that such finding on invoicing procedure was too technical - It is apparently clear that no such inconvenience would be forthcoming in staying the impugned order appealed against and mere apprehension that respondent may continue such practice in subsequent years to the disadvantage of department has no basis. The stay petition filed on behalf of the appellant department, being devoid of merit, is rejected.

Summary

Issues: Stay petition filed by the appellant department for stay of operation of the order setting aside duty demand against cenvat credit.

Analysis:
The appellant department filed a stay petition seeking to suspend the order passed by the Commissioner setting aside the duty demand against cenvat credit, amounting to ?27,83,751, along with interest and penalty. The department argued that unless the order-in-original is stayed, there will be a revenue loss to the government. The department contended that the respondent may continue to avail cenvat credit through improper invoicing. However, the counsel for the respondent argued that the credit was not inadmissible, and any alleged improper invoicing did not justify refusing the credit. The counsel further highlighted that there had been no recurrence of such invoicing in subsequent financial years, making the grant of stay unnecessary.

Upon reviewing the case records, it was noted that the cenvat credit availed by the respondent was deemed inadmissible, and duty demand was confirmed initially but set aside by the Commissioner on the grounds that the finding on invoicing procedure was overly technical. The Tribunal observed that there was no concrete basis to suggest that staying the impugned order would lead to any inconvenience, as the Commissioner's decision was within the bounds of the law. The Tribunal dismissed the stay petition filed by the appellant department, emphasizing that the mere apprehension of the respondent continuing the alleged practice in subsequent years did not hold sufficient merit to justify the stay.

The Tribunal acknowledged the potential inconvenience the respondent might face if the order-in-original were enforced during the appeal process. Consequently, the stay petition was rejected on the grounds of lacking merit. The judgment was pronounced on 29.08.2018, concluding the Tribunal's decision on the stay petition.