2009 (8) TMI 975 - AT - Central Excise

Summary

Issues involved: Application for waiver of predeposit of duty u/s Rule 8 (3A) of the Central Excise Rules, 2002 for default in payment of duty for specific months.

Summary:
The judgment by the Appellate Tribunal CESTAT CHENNAI dealt with an application for waiver of predeposit of duty amounting to Rs. 59,90,246/- + Rs. 20,80,628/- along with interest and penalty. The demand arose due to default in payment of duty for the months of Nov., '06, Dec., '06, and Jan., '07, invoking Rule 8 (3A) of the Central Excise Rules, 2002. The department also relied on sub-rule (4) of Rule 3 of Cenvat Credit Rules, 2004 regarding utilization of Cenvat credit for duty payment on final products.

The applicants argued that there was no prohibition on using Cenvat credit for arrears payment and contended that a significant sum had already been paid. They cited a Tribunal decision to support their stance. The opposing view highlighted that Cenvat credit cannot be utilized in case of default beyond 30 days from the due date, which was the situation in this case.

After considering the submissions, the Tribunal found the cited decision applicable to the present case and decided to waive the pre-deposit, staying the recovery of the disputed amounts pending the appeal.