2004 (12) TMI 467 - AT - Central Excise

Summary

Issues: Application for waiver of pre-deposit of Central Excise duty and penalty due to discrepancy in received quantities of inputs.

In this judgment by the Appellate Tribunal CESTAT, New Delhi, the issue at hand was an application by M/s. Hindalco Industries Ltd. for the waiver of pre-deposit of Central Excise duty amounting to Rs. 18,88,869.88 and an equal penalty. The appellant's advocate argued that the discrepancy in the received quantities of inputs, ranging from 0.08% to 0.39%, could be attributed to various factors such as errors in measurement, different weighing scales, temperature changes, or drying up of moisture. He cited a previous decision by the Tribunal in the case of Neera Enterprises v. CCE, Chandigarh, to support the claim that Modvat credit is available when the weight of inputs in receipt is not substantially different from the weight of inputs actually received. On the other hand, the Senior Departmental Representative contended that Modvat credit is only applicable to inputs actually received and used in the manufacturing process, and since the quantity received was short, no credit should be granted.

After considering both arguments, the Tribunal found that the difference in weight of the inputs, ranging from 0.08% to 0.39%, could be attributed to various factors as mentioned by the appellant's advocate. The Tribunal noted that the appellant had made a strong prima facie case in their favor for the waiver of the pre-deposit of the entire amount of duty and penalty. Consequently, the Tribunal ordered a stay on the recovery of the duty and penalty during the pendency of the appeal, which was scheduled for regular hearing on 10-3-2005.