2008 (3) TMI 556 - AT - Central Excise

Summary

Issues: Application for waiver of pre-deposit of duty under Rule 6(3)(b) of the Cenvat Credit Rules, 2004.

Analysis:
1. The issue before the Appellate Tribunal was the application for waiver of pre-deposit of duty amounting to Rs. 69,34,186, out of the total duty of Rs. 74,80,050, confirmed under Rule 6(3)(b) of the Cenvat Credit Rules, 2004. The duty was related to the clearance of metalised flexible polyester/CPP film under job work. The applicants sought total waiver on the grounds that the goods cleared by the job worker were exempted goods and that Cenvat credit is eligible to the job worker. They relied on the Tribunal's decision in a previous case and argued that the adjudicating authority erred in distinguishing the Larger Bench's decision. The Tribunal found a strong prima facie case for total waiver based on the submissions made by the applicants regarding the eligibility of Cenvat credit to job workers and the interpretation of relevant legal provisions and precedents.

2. The Tribunal noted that the adjudicating authority had erred in distinguishing the Larger Bench's decision based on the context of a specific notification and the timing of certain legal provisions. The Tribunal clarified that the Larger Bench's decision was not rendered on the interpretation of the said notification and that the reference to it was made in a different judgment. Additionally, the Commissioner's error in distinguishing the Larger Bench's decision based on the period covered by it was highlighted. The Tribunal pointed out that the relevant legal provision regarding exemption from duty applied only to goods unconditionally exempted, which was not the case in the present situation where the exemption was subject to specific conditions like filing declarations.

3. In light of the arguments presented and the analysis of the legal provisions and precedents, the Appellate Tribunal decided to waive the pre-deposit of the duty confirmed against the applicants and stayed the recovery pending the appeal. The decision was based on the strong prima facie case made by the applicants regarding the eligibility of Cenvat credit for job workers and the errors identified in the adjudicating authority's and Commissioner's reasoning for not granting the waiver. The Tribunal's decision aimed to ensure fairness and justice in the resolution of the dispute related to the duty pre-deposit under the Cenvat Credit Rules, 2004.