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2014 (2) TMI 140 - AT - Service Tax


Issues:
Waiver of pre-deposit of confirmed amount, availing CENVAT Credit on common input services for dutiable and exempted goods, imposition of penalties under Rule 26 of Central Excise Rules, 2002.

Analysis:
The Stay Petitions were filed seeking waiver of pre-deposit of an amount confirmed as payable by the appellant for availing CENVAT Credit on common input services used for manufacturing both dutiable and exempted goods. The adjudicating authority had confirmed the demand, including interest and penalties under Rule 26 of Central Excise Rules, 2002, against the appellants. The appellant contended that the entire Service Tax amount on the common input services had been reversed before the issuance of the show cause notice, and there were additional legal points to be argued before the Bench.

Upon hearing the arguments, it was observed that the appellant had indeed reversed the entire amount of Service Tax credit availed on the common input services, which were utilized for manufacturing both dutiable and exempted products. Consequently, it was prima facie established that the appellant had not actually availed the Service Tax credit on the common input services. This reversal was deemed sufficient for the purpose of hearing and deciding the appeals on their merits.

In light of the above findings, the Tribunal concluded that the reversal of the Service Tax credit amount constituted an adequate deposit to enable the appeals to be heard and adjudicated on their substantive merits. Therefore, the applications for waiver of pre-deposit of the amounts in question were allowed, and the recovery of the same was stayed during the pendency of the appeals. This decision was pronounced in court by the Tribunal.

 

 

 

 

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