CESTAT Bangalore: Conditions for Service Tax Pre-Deposit Waiver

The Appellate Tribunal CESTAT, BANGALORE, in a case concerning the waiver of pre-deposit of Service tax, found that the applicant had not established a prima facie case for complete waiver. The Tribunal imposed conditions, directing the applicant to freeze a specified amount in the RG 23 Cenvat account. Upon compliance, the waiver of the remaining amounts' pre-deposit was allowed, and recovery was stayed pending the appeal's final disposal, with a compliance report due by a specified date.

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Issues: Stay petition against waiver of pre-deposit of Service tax.

In this judgment by the Appellate Tribunal CESTAT, BANGALORE, the issue at hand was the confirmation of demand due to the ineligibility of the applicants to avail Cenvat credit on Service tax paid on input services. The learned counsel argued that the credit was taken on maintenance and repair services and GTA Services. However, upon reviewing the records, it was found that the credit availed on Service tax paid on maintenance and repair services was contentious. The appellant had entered into an Annual Maintenance Contract (AMC), but the services were actually rendered by dealers of other manufacturers. Due to the contentious nature of the issue, the Tribunal decided that a detailed examination of the submissions and evidence was necessary during the final hearing. As a result, the Tribunal concluded that the applicant had not established a prima facie case for complete waiver and imposed conditions. The applicant was directed to freeze an amount of Rs. 1,00,00,000/- in the RG 23 Cenvat account until the appeal's disposal. Upon compliance with this condition, the application for waiver of the pre-deposit of the remaining amounts was allowed, and recovery thereof was stayed until the appeal's final disposal, with a compliance report due on 27-10-2009.

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