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2004 (11) TMI 480 - AT - Central Excise
Issues involved:
Application for waiver of pre-deposit of duty based on Modvat credit denial for using LDO in a power plant situated away from the factory. Analysis: The applicant sought waiver of duty pre-deposit amounting to Rs. 2,32,69,217, as Modvat credit was disallowed due to using LDO in a power plant located 14 kms from the factory. The dispute centered on the definition of inputs during the relevant period, which encompassed goods used in or in relation to the final product's manufacture in the factory. The appellant cited a Tribunal decision in Finolex Industries Ltd. v. CCE, where credit for capital goods used at a Jetty was allowed. However, in that case, the Jetty was part of the factory's approved ground plan, unlike the power plant in the present case, which was not included in the approved plan under the Indian Factories Act. Consequently, the Tribunal found it unsuitable for a total waiver of duty. The appellant argued financial hardship due to losses, leading to the directive to deposit Rs. 1 crore within eight weeks. Upon this deposit, the remaining duty pre-deposit was waived for the appeal hearing, scheduled for 10-2-2005. This judgment reflects a nuanced analysis of the Modvat credit denial issue based on the location of the power plant vis-a-vis the factory and the definition of inputs during the relevant period. The Tribunal distinguished the present case from a previous decision where a similar credit was allowed for a Jetty due to the Jetty's inclusion in the factory's approved ground plan. The Tribunal's consideration of the appellant's financial hardships and the directive to deposit a specified amount within a timeframe showcases a balanced approach in addressing the waiver application while ensuring compliance with the duty pre-deposit requirements. The decision to waive the remaining duty pre-deposit upon the initial deposit signifies a practical resolution to facilitate the appeal process, demonstrating a fair and pragmatic adjudication approach by the Tribunal.
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