CESTAT Ahmedabad grants waiver on interest & penalties for Cenvat credit, stays recovery pending appeal

The Appellate Tribunal CESTAT Ahmedabad, in a judgment by Mr. M.V. Ravindran, allowed the appellant's applications for waiver of pre-deposit of interest and penalties related to the availment of Cenvat credit on service tax paid on GTA services. The Tribunal stayed the recovery of these amounts pending appeal disposal, noting the appellant's reversal of the entire service tax credit and deposit confirmation by the Departmental Representative. Both parties agreed to an out-of-turn hearing due to the substantial amount involved, leading to the Tribunal scheduling the appeals for disposal on 08.7.2013.

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Issues:
- Availment of Cenvat credit on service tax paid on GTA services.

Analysis:
The judgment by the Appellate Tribunal CESTAT Ahmedabad, delivered by Mr. M.V. Ravindran, addresses three stay petitions concerning a common issue related to the availment of Cenvat credit on service tax paid on GTA services by the same assessee. The period in question spans from April 2005 to March 2008 in one appeal and April 2008 to May 2009 in the other. The appellant reversed the entire service tax credit of Rs. 5,00,55,183 by a debit entry in RG 23A Part-II and notified the department about this reversal on 10.03.2011 through a formal letter. The Departmental Representative confirmed that the amount was indeed deposited as per the mentioned letter.

The Tribunal noted that the disputed amount in the appeals was a result of the appellant availing Cenvat credit suo-motto. Considering this, the Tribunal found that the appellant had presented a case for the waiver of pre-deposit of the interest and penalties imposed by the lower authorities. Consequently, the Tribunal allowed the applications for the waiver of pre-deposit of the interest and penalties, and the recovery of these amounts was stayed pending the disposal of the appeals.

Recognizing the substantial amount involved in the case, both parties agreed to request an out-of-turn hearing. The Tribunal granted this request, directing the registry to list the appeals for disposal on 08.7.2013. The judgment was dictated and pronounced in the Court by Mr. M.V. Ravindran, one of the presiding judges.

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