2008 (2) TMI 761 - AT - Central Excise

Summary

Issues involved:
1. Irregular availment of Cenvat credit leading to demand of duty and penalty.
2. Dispute regarding disclosure of information and intention to evade duty.

Issue 1: Irregular availment of Cenvat credit:
The appellants were required to pre-deposit duty and penalty due to the irregular availment of Cenvat credit for duty amount debited in the Duty Entitlement Pass Book. The Revenue invoked a longer period based on the ground of irregular availment of Cenvat credit, citing the Larger Bench judgment in Essar Steels Ltd. v. CCE, Visakhapatnam. However, the appellants argued that they had two judgments in their favor prior to the Larger Bench judgment, indicating no intention to evade duty. Despite their submissions, the demands were confirmed by invoking the longer period. The Tribunal found that the appellants had been filing returns and had a bona fide belief in their eligibility based on the earlier judgments. The stay application was allowed, granting waiver of pre-deposit and staying the recovery, with no recovery even after 180 days of the stay order.

Issue 2: Disclosure of information and intention to evade duty:
The Department contended that there was no clear information and disclosure regarding the availment of credit, which was later discovered by them. The Department argued that the benefit of waiver of pre-deposit was not available to the appellants, making the demands recoverable u/s 11A. However, the Tribunal noted that the appellants had furnished all details and had no intention to evade duty, as evidenced by their belief in their eligibility based on previous Tribunal judgments. The Tribunal held that the appellants had a prima facie case on time-bar and allowed the stay application, preventing recovery even after the lapse of 180 days of the stay order in line with the judgments of higher courts and Tribunal.