Prima facie case for Cenvat credit credit led to waiver of pre-deposit and stay of recovery of disputed dues.

A prima facie case was found for waiver of pre-deposit and stay of recovery where the invoices bore the assessee's addresses and the denial of credit was based only on alleged non-compliance with Rule 7 of the Cenvat Credit Rules, 2004. The record did not show excess credit over the invoices or exclusive engagement in exempted manufacture or exempted services, so the disputed service tax credit and consequential penalty were stayed pending appeal.

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Issues: Whether the appellant had made out a prima facie case for waiver of pre-deposit and stay of recovery in respect of the disputed service tax credit and consequential penalty.

Analysis: The invoices were found to bear the assessee's addresses, though not the factory address, and the denial of credit rested on the alleged non-compliance with the procedure for distribution of input service credit under Rule 7 of the Cenvat Credit Rules, 2004. The record did not show that credit had been taken in excess of the amount reflected in the invoices or that the assessee was exclusively engaged in exempted manufacture or exempted services. In these circumstances, the appellant established a prima facie case against the demand and penalties.

Conclusion: The request for waiver of pre-deposit was granted and recovery of the adjudged dues was stayed till disposal of the appeal.

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