CENVAT credit on invoices from a separate legal entity: prima facie interim protection granted against recovery.

CENVAT credit denial was challenged on the basis that invoices were issued by a separate legal entity distributing expenses under Business Support Service. The Tribunal noted prima facie that the invoicing entity was not an extended arm of the applicant, such as a head office or branch office, and therefore the Revenue's objection did not displace the applicant's interim case. On that footing, waiver of pre-deposit and stay of recovery were granted during pendency of the appeal.

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Issues: Whether the applicant was entitled to waiver of pre-deposit and stay of recovery in proceedings involving denial of CENVAT credit on invoices issued by a separate legal entity.

Analysis: The application concerned a demand of CENVAT credit and penalty. The dispute turned on whether the entity issuing the invoices was required to be registered as an input service distributor and whether credit could be denied on the basis that it was distributing expenses and raising invoices under the head of Business Support Service. The Tribunal held, prima facie, that the entity was a separate legal entity and could not be treated as an extended arm of the applicant like a head office or branch office. On that basis, the Revenue's objection did not displace the applicant's prima facie case for interim protection.

Conclusion: The applicant was held entitled to waiver of pre-deposit and stay of recovery during pendency of the appeal.

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