Rule 6 and common input services: Tribunal grants only partial pre-deposit relief where waiver claim is merely arguable.

In a dispute over Cenvat credit on common input services used for both dutiable and exempted goods, the Tribunal held that the applicability of Rule 6 to input services was only prima facie arguable and required fuller examination of the scheme and cited case law. Complete waiver of pre-deposit was therefore not justified at the interim stage. Partial interim relief was granted instead, with a direction to deposit Rs. 10 lakhs and stay of balance pre-deposit and recovery subject to compliance pending disposal of the appeal.

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Issues: Whether the appellant was entitled to complete waiver of pre-deposit in a dispute concerning availment of Cenvat credit on common input services used for both dutiable and exempted goods, and whether the restriction in Rule 6 applied to input services in the same manner as inputs.

Analysis: The issue concerned credit taken on services used commonly in the manufacture of both dutiable and exempted products. On a prima facie view, the restriction requiring maintenance of separate accounts appeared to operate in relation to inputs, and its application to input services required fuller examination of the scheme of Rule 6 and the case law cited. The matter was therefore treated as arguable, but not fit for complete waiver at the interim stage.

Conclusion: Complete waiver of pre-deposit was declined. The appellant was directed to deposit Rs. 10 lakhs, and balance pre-deposit and recovery were stayed subject to compliance.

Final Conclusion: The stay application was allowed only to the extent of partial waiver, with conditional protection against recovery for the remaining demand pending disposal of the appeal.

Ratio Decidendi: Where the applicability of Rule 6 to common input services is only prima facie arguable, complete waiver of pre-deposit is not warranted and the tribunal may grant only partial interim relief.

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