2005 (3) TMI 657 - AT - Central Excise

Summary

Issues:
1. Application for waiver of pre-deposit amount and penalty.
2. Interpretation of Rule 3(6)(b) of the Cenvat Credit Rules, 2001.
3. Eligibility to use Cenvat credit for payment of duties on final products.
4. Prima facie case for waiver based on statutory provisions.
5. Time limit for mentioning figures in statutory records.

Analysis:

1. The case involved an application by M/s. K.G. Denim Ltd. for the waiver of a pre-deposit amount and penalty totaling Rs. 32,40,810. The demand was confirmed against them for utilizing Additional Duties of Excise for payment under a different Act, which was contested by the appellant's advocate.

2. The main issue revolved around the interpretation of Rule 3(6)(b) of the Cenvat Credit Rules, 2001. The appellant argued that they are eligible to use Cenvat credit of any duty towards payment of any duty on final products, citing a specific clause in the rule. However, the respondent contended that the credit in question must be utilized only towards payment under the specific Act, as per the rule.

3. The eligibility to use Cenvat credit for payment of duties on final products was a key point of contention. The appellant relied on a previous decision to support their argument, while the respondent emphasized the specific provisions of the rule that restrict the use of credit to duties leviable under the same Act.

4. The Tribunal considered the submissions from both sides and concluded that the provisions of Rule 3(6)(b) are clear and specific. It was held that the applicants did not establish a prima facie case in their favor based on the statutory provisions of the Cenvat Credit Rules. The argument regarding the time limit for mentioning figures in statutory records was also addressed and dismissed.

5. As a result, the Tribunal directed the applicants to deposit a specified sum within a given timeframe, with a waiver of the remaining amount of duty and penalty, along with a stay of recovery during the appeal's pendency. The case was scheduled for compliance reporting on a specific date.

This detailed analysis highlights the key issues, arguments presented by both parties, the Tribunal's interpretation of the relevant rules, and the final decision rendered in the judgment.