Pre-deposit waiver in Cenvat credit dispute granted where revenue loss was not shown and prima facie relief was made out

Waiver of pre-deposit was granted in a dispute over denial of Cenvat credit under Rule 4(7) of the Cenvat Credit Rules, 2004. The demand related to service tax credit taken on contract amounts where part of the consideration was retained for final settlement. Relying on the departmental circular, the appellant contended that service tax had already been paid by the service providers. On the available facts, the Tribunal found that the Revenue had not shown revenue loss and that the appellant had established a prima facie case for interim relief, so the stay petition was allowed.

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Issues: Whether the appellant was entitled to waiver of pre-deposit in a matter involving denial of Cenvat credit under Rule 4(7) of the Cenvat Credit Rules, 2004.

Analysis: The demand arose from credit taken in respect of service tax paid on contract amounts where part of the consideration was retained for final settlement. The appellant relied on the departmental circular to contend that the tax had been paid by the service providers. On the available facts, the Tribunal found that the Revenue had not made out a case of revenue loss and that the appellant had shown a case for interim relief.

Conclusion: The appellant was entitled to waiver of pre-deposit and the stay petition was allowed.

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