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of <h1>Tribunal dismisses stay application due to pending petition, grants waiver of pre-deposit</h1> <h3>Anglo French Drugs & Industries Ltd. Versus Commissioner of Central Excise, Bangalore</h3> The Tribunal dismissed a miscellaneous application seeking a stay on the impugned order, deeming it infructuous due to a pending stay petition. The case ... Stay application – waiver of pre-deposit – whether Input Service Distributor (ISD) cannot distribute the credit for only one manufacturing premise, when they have various manufacturing units – Held that:- In the case of Ecof Industries (P.) Ltd. (2009 (10) TMI 171 (Tri)) provisions of Rule 7 has been analysed in depth and has been settled that the ISD can distribute the credit even to only one unit - Application for waiver of pre-deposit allowed – stay application allowed Issues:- Dismissal of miscellaneous application for staying the operation of the impugned order- Stay petition filed for waiver of pre-deposit of specific amounts- Allegations regarding irregular availing of input service credit- Interpretation of Rule 7 of the Cenvat Credit Rules- Legal proposition regarding distribution of service tax credit by Input Service Distributor (ISD)- Consideration of submissions by both parties- Decision on waiver of pre-deposit and stay of recoveryThe judgment starts with the dismissal of a miscellaneous application seeking a stay on the operation of the impugned order, as it was considered infructuous due to the listing of the stay petition on the same day. The stay petition was filed to waive the pre-deposit of specific amounts, including credit, interest, and penalties. The case revolves around the appellant's alleged irregular availing of Cenvat credit distributed by the Input Service Distributor (ISD). The Adjudicating Authority found that the credit was entitled only if the appellant had one manufacturing unit, not two, and the Head Office distributed the entire credit to the appellant in Bangalore. The appellant argued that the Adjudicating Authority exceeded the show-cause notice's allegations by including service tax credit on trading activities, a point not initially raised.The Departmental Representative contended that the show-cause notice mentioned a trading center in addition to manufacturing units, implying service tax credit availed on trading activities. However, the appellant's service tax returns did not specify the credit for trading activities separately. The Tribunal analyzed the submissions and records, noting discrepancies in the show-cause notice and the Adjudicating Authority's interpretation of Rule 7 of the Cenvat Credit Rules. The Tribunal referenced the legal precedent set in a previous case to support the appellant's argument that the ISD can distribute credit even to a single manufacturing unit.The Tribunal found merit in the appellant's case for waiver of pre-deposit, considering the legal proposition and lack of clarity on availing credit for trading activities. It was decided to allow the application for waiver of pre-deposit and stay the recovery of the amounts until the appeal's final disposal. The judgment emphasized the need for a thorough review of legal provisions and previous decisions before making a final determination on the case.
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