Appellant wins waiver for Cenvat credit on steel for unipoles in Advertising Services

The Tribunal granted the appellant's application for waiver of pre-deposit of the demand amount, interest, and penalty under the Cenvat Credit Rules, 2004. The appellant, engaged in providing output services under "Advertising Services," successfully argued that the steel used for fabrication and erection of unipoles constitutes eligible input for Cenvat credit. The Tribunal found in favor of the appellant, establishing a prima facie case for waiver of pre-deposit and stayed recovery pending appeal disposal.

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Issues:
Wavier of pre-deposit of demand amount, interest, and penalty under Cenvat Credit Rules, 2004.

Analysis:
The appellant filed a stay petition seeking wavier of pre-deposit of the demand of Rs. 21,53,704/- under sub-section (2) of Section 73 of Finance Act, interest under Section 75 of the Finance Act, 1994, and penalty of Rs. 21,53,704/- under Rule 15(2) of Cenvat Credit Rules, 2004 read with Section 11AC of the Central Excise Act. The lower authorities contended that the 'unipoles' fabricated from steel are immovable property and not capital goods. The appellant argued that they provide output services under "Advertising Services" and do not manufacture items. They also claimed that the demand is time-barred as they regularly filed ST-3 returns. The Departmental Representative (DR) defended the order, stating that the steel procured by the appellant became part of immovable property, making it non-excisable. The DR alleged that the appellant did not declare in ST-3 returns the use of steel for fabrication and erection, constituting suppression of facts.

The Tribunal carefully reviewed the submissions and records. It was noted that the appellant solely provides output services under advertisement services, displaying advertisements on unipoles fabricated and erected by them. Referring to the definition of "input" under Rule 2(k) of Cenvat Credit Rules 2004, the Tribunal highlighted that all goods, except specified items, used for providing any output service are eligible for Cenvat credit. The Tribunal found that the appellant established a prima facie case for wavier of pre-deposit of the amounts determined by the adjudicating authority and affirmed by the Commissioner (Appeals). Consequently, the application for wavier of pre-deposit was granted, and recovery was stayed pending the appeal's disposal. The judgment was pronounced and dictated in an open court session.

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