Input service coverage for fixed asset valuation supported full waiver of pre-deposit and interim stay relief.

Valuation of fixed assets was treated as an activity relating to business and, on that prima facie basis, as input service under Rule 2(l) of the Cenvat Credit Rules, 2004. The applicant therefore showed a sufficient case for relief against the demand of Cenvat credit and penalty at the stay stage. The absence of any subsequent show cause notice on the same issue further supported the request for interim protection. Full waiver of pre-deposit was granted and the stay petition was allowed.

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Issues: Whether the applicant was entitled to waiver of pre-deposit in respect of the demand of Cenvat credit and penalty, in view of the claim that credit on valuation of fixed assets fell within input service used in relation to business.

Analysis: The valuation of fixed assets was treated as falling within activities relating to business and, therefore, within the definition of input service under Rule 2(l) of the Cenvat Credit Rules, 2004. It was also noted that no subsequent show cause notice had been issued on the same issue, supporting the applicant's prima facie case for relief at the stay stage.

Outcome: Full waiver of pre-deposit was granted and the stay petition was allowed.

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