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CUSTOM EXCISE & SERVICE TAX APPELLATE TRIBUNAL, BANGALORE
P.G. CHACKO, M. VEERAIYAN, JJ.
IBM India (P.) Ltd. -Appellant
Versus
Commissioner of Central Excise & Service Tax, LTU, Bangalore -Respondent
STAY ORDER NO. 790 OF 2012 APPLICATION NO. ST/STAY/1876 OF 2011 APPEAL NO. ST/3014 OF 2011
Decided On : 14-05-2012
M. Jaising,M.M. Ravi Rajendran
P.G. Chacko, Judicial Member - This application filed by the appellant seeks waiver and stay in respect of an amount of Rs. 3,22,84,927/- availed as CENVAT credit on 'input services' by the appellant by way of transfer from the CENVAT accounts of two companies viz. Telelogic India Pvt. Ltd. and Cognos Software Pvt. Ltd. which were acquired by the appellant in November 2008 and January 2009 respectively under 'Business Transfer Agreements'. On a perusal of the records and hearing both sides, we note that CENVAT credit on 'input services' taken by "Telelogic" amounting to Rs. 1,47,34,988/- and similar CENVAT credit on 'input services' taken by "Cognos" amounting to Rs. 1,75,49,939/- were transferred to the appellant's CENVAT account and taken by the latter, which is now in question in the present case. The dispute revolves around Rule 10 of the Cenvat credit Rules, 2004. The department is of the view that no transfer of credit on 'input services' is permissible under the above rule. They say that the rule can be invoked only for transfer of CENVAT credit taken on inputs and capital goods. To be precise, according to the department, there should be at least a nominal transfer of CENVAT credit on inputs along with 'input services' for the appellant to claim the benefit of Rule 10 in respect of 'input services'. According to the appellant, they are entitled to transfer of CENVAT credit on 'input services' also in respect of inputs and capital goods. On a conjoint reading of sub-rules (1), (2) and (3) of Rule 10, we have found prima facie case for the appellant. Accordingly there will be waiver of pre-deposit and stay of recovery in respect of the adjudged dues.
