2009 (5) TMI 719 - AT - Central Excise

Summary

Issues:
Waiver of pre-deposit of duty and penalty based on Cenvat Credit Rules, 2004.

Analysis:

Issue 1: Pre-deposit of duty and penalty
The applicant sought waiver of pre-deposit of duty and penalty amounting to Rs. 1,03,267/- each. The case involved the clearance of capital goods based on transaction value, leading to a dispute regarding the reversal of credit availed on such clearance as per Rule 3(5) of the Cenvat Credit Rules, 2004. The Commissioner (Appeals) held the applicant liable to reverse the credit. However, a Tribunal precedent in Cummins India Ltd. v. CCE, Pune-III provided a different interpretation, stating that the assessee was not required to reverse the credit upon removal of old, damaged, and un-serviceable capital goods. The Tribunal noted an amendment that allowed for a reduction in the credit amount. The Tribunal found the applicant failed to establish a prima facie case for a waiver of the entire duty and penalty amount.

Issue 2: Examination of value declared
The Tribunal highlighted the need to examine whether the value declared by the applicant falls within the reduction limit specified in the Rules amendment. The amendment introduced a percentage reduction for each quarter of a year or part thereof from the date of taking Cenvat credit on removed capital goods. This examination was deemed necessary to determine the applicability of the reduction and its impact on the duty and penalty amounts in question.

Issue 3: Tribunal's decision
Considering the above factors, the Tribunal directed the applicant to deposit Rs. 30,000 within six weeks, with the remaining duty and penalty amount waived pending the appeal's disposal. The Tribunal emphasized the need for compliance by a specified date and pronounced the order in open court on 15-5-2009. The decision reflected a balanced approach, requiring a partial deposit while granting a waiver for the remaining amount subject to compliance.

In conclusion, the judgment by the Appellate Tribunal CESTAT, New Delhi addressed the issues of pre-deposit of duty and penalty under the Cenvat Credit Rules, 2004, examining relevant precedents and amendments to determine the applicant's liability and the extent of waiver granted. The decision underscored the importance of compliance and adherence to statutory provisions in such matters.