2009 (2) TMI 650 - AT - Central Excise

Summary

Issues involved: Applicability of Cenvat credit, reversal of credit, entitlement to credit, legality of taking credit suo motu, waiver of dues.

Applicability of Cenvat credit: The appellants were availing Cenvat credit on inputs and capital goods, which the department objected to. The Assistant Commissioner later held that the appellants were entitled to avail the credit. The Revenue contended that the appellants should have availed a refund claim instead of taking suo motu credit.

Legal entitlement to credit: The Tribunal considered the Larger Bench decision in BDH Industries Ltd. v. Commissioner of Central Excise, where the Departmental Representative relied on it. However, the Advocate distinguished the facts of the case at hand from the Larger Bench decision and cited a similar situation addressed by the Gujarat High Court, emphasizing the right to avail credit without seeking permission post a favourable order.

Waiver of dues: After careful consideration, the Tribunal noted that the appellants had not utilized the credit until receiving a favourable order. Citing precedents and the Gujarat High Court decision, the Tribunal found the appellants had a strong case on merits. Consequently, the Tribunal ordered a waiver of the entire dues demanded in the impugned order until the appeal's disposal, with a directive to refrain from coercive measures.

Conclusion: The Tribunal ruled in favor of the appellants, granting a waiver of dues pending appeal based on the strong merits of their case and the legal precedent cited, emphasizing the appellants' cautious approach in utilizing the credit and the lack of fault in their actions.