2008 (10) TMI 491 - AT - Central Excise

Summary

Issues:
1. Requirement of separate account maintenance for input services in the manufacturing process.
2. Applicability of Rule 6 of the Cenvat Credit Rules, 2004.
3. Waiver of pre-deposit under Section 35F of the Central Excise Act.

Analysis:
1. The appellant, engaged in barley malt manufacturing, faced a dispute regarding maintaining separate accounts for input services used in manufacturing barley malt and rootlets. The appellant did not keep separate accounts, leading to a demand for payment based on Rule 6 of the Cenvat Credit Rules, 2004. The appellant argued that the input services could not be separated for valuation purposes. The tribunal analyzed a stay order in a similar case but found it not entirely supportive. However, it acknowledged the argument that input services should not be dissected for valuation. Consequently, a prima facie case was found in favor of the appellant for waiving pre-deposit.

2. The dispute involved the interpretation of Rule 6 of the Cenvat Credit Rules, 2004, concerning the payment of 10% of the price of rootlets. The appellant's reliance on a stay order in another case was considered, but the tribunal found more merit in the argument against dissecting input services for valuation purposes. As a result, the tribunal waived the pre-deposit of the duty amount with interest and penalty, staying the recovery until the appeal's disposal.

3. The appellant sought a waiver of pre-deposit under Section 35F of the Central Excise Act. The tribunal, after considering the arguments and the nature of the dispute, granted the waiver and stayed the recovery until the appeal's final decision. The stay application was disposed of accordingly, providing relief to the appellant in terms of pre-deposit requirements.