2009 (1) TMI 678 - AT - Central Excise

Summary

Issues:
Demand of duty on capital goods installed in unregistered premises, waiver of predeposit, stay of recovery pending appeal.

Analysis:
The judgment deals with the demand of Rs. 63,59,864/- towards credit of duty on capital goods installed in premises not registered with the department as a factory. The impugned order also imposed an equal penalty on the appellants under Rule 15 of Cenvat Credit Rules, 2004. The appellants sought waiver of predeposit and stay of recovery of these dues to hear the appeal. The Tribunal found that the appellants could have validly availed the credit if they had followed the CBEC Circular No. 211/45/96-CX and obtained the approval of the Commissioner as stipulated in it. The Commissioner observed that the appellants had not followed the prescribed procedure and availed the credit by suppressing facts. However, the Tribunal noted that the appellants carried out manufacturing activity in the premises where the capital goods were installed, albeit not registered as part of the factory. The Tribunal considered the violation as technical and found the appellants eligible for credit. It directed a waiver of predeposit of dues and a stay of recovery pending appeal.

The judgment also highlighted the importance of following the prescribed procedures and obtaining necessary approvals for availing credits. It emphasized the need for compliance with Circulars and instructions issued by the CBEC to ensure the validity of credit availed. The Tribunal acknowledged that the violation in this case was technical and that the appellants had shown the particulars of availment of capital goods in their accounts. The decision to waive predeposit and stay recovery was based on the prima facie eligibility of the appellants for credit, pending further examination of the time bar issue concerning the availment of credit shown in statutory returns. The Tribunal's order aimed at ensuring a fair hearing of the appeal while balancing the interests of both parties involved in the dispute.

In conclusion, the judgment addressed the demand of duty on capital goods installed in unregistered premises, focusing on the procedural compliance required for availing credits. It underscored the technical nature of the violation and the eligibility of the appellants for credit, leading to the decision to waive predeposit and stay recovery pending appeal. The Tribunal's decision aimed at upholding principles of fairness and providing an opportunity for a thorough examination of the case during the appeal process.