2008 (2) TMI 745 - AT - Central Excise

Summary

Issues involved: Jurisdictional issue regarding demand under Rule 14 of the Cenvat Credit Rules, 2004 u/s Section 11A(1) of the Central Excise Act/Section 73 of Chapter V of the Finance Act, 1994. Prima facie case against the demand on merits. Reference to Larger Bench regarding outward transportation of final product as an input service for Cenvat credit purposes.

Jurisdictional Issue: The Commissioner demanded amounts from the assessee under Rule 14 of the Cenvat Credit Rules, 2004, which the appellant argued is not within the ambit of Chapter V of the Finance Act. The Commissioner's order under Section 84 of the Finance Act, 1994 was challenged as lacking jurisdiction since it pertained to Cenvat credit, not falling under Chapter V. The appellant claimed a prima facie case against the demand on merits. The issue of jurisdiction was deemed substantial and directed to be considered by the Division Bench.

Reference to Larger Bench: The appellant cited a reference to a Larger Bench regarding the recognition of outward transportation of final products as an input service for Cenvat credit purposes. The appellant argued for waiver of pre-deposit and stay of recovery based on this reference. The respondent opposed, citing a different decision by the South Zonal Bench (Chennai) which was followed for judicial propriety and consistency.

Division Bench's Decision: The Division Bench had previously granted waiver of pre-deposit and stay of recovery in a similar case involving India Cements Ltd. The present Bench, after considering this precedent, followed the Division Bench's decision and granted waiver of pre-deposit and stay of recovery in the current case. The decision was made in the interest of judicial propriety and consistency.

Intervention by Another Party: Another party intervened, highlighting a similar case where waiver of pre-deposit and stay of recovery was granted by the Division Bench. This intervention influenced the final decision to follow the Division Bench's decision for consistency.

Conclusion: The judgment addressed the jurisdictional issue raised by the appellant and directed the appeal to be posted before the Division Bench for consideration. The decision to grant waiver of pre-deposit and stay of recovery was based on the Division Bench's previous ruling and the need for judicial propriety and consistency.