2010 (5) TMI 726 - AT - Central Excise

Summary

Issues:
1. Waiver of pre-deposit of inadmissible Cenvat credit availed.
2. Interpretation of Chapter 29 Note 10 regarding manufacturing activity.
3. Sustainability of demand confirmed by the Commissioner (Appeals).

Analysis:
1. The appellant sought a waiver of pre-deposit of Rs. 5,62,616/- for inadmissible Cenvat credit availed during February 2003 to September 2007, along with penalties imposed. The authorities contended that Styrene Monomer cleared in MS Drums was not eligible for Cenvat credit, leading to the demand. The Commissioner (Appeals) limited the demand to the normal period, finding no suppression of facts by the appellant. The Tribunal, after considering submissions, held that the packing of Styrene Monomer in MS Drums did not qualify as repacking from bulk to retail packs, thus ruling against the appellant's entitlement to Cenvat credit on MS Drums. The appellant was directed to pre-deposit the entire demanded amount within four weeks.

2. The appellant argued that the packing of Styrene Monomer in MS Drums constituted manufacturing activity as per Chapter 29 Note 10, which deems certain processes as manufacturing. However, the Departmental Representative contended that the activity did not meet the criteria for manufacturing under the chapter note. The Tribunal, upon evaluation, found that the process of packing Styrene Monomer in MS Drums did not amount to repacking from bulk to retail packs as required for manufacturing activity under Note 10. Consequently, the appellant's claim for Cenvat credit on MS Drums was deemed unsustainable, and duty liability was imposed on the cleared Styrene Monomer.

3. The Tribunal carefully reviewed the contentions and determined that the appellant's actions did not align with the manufacturing criteria outlined in Chapter 29 Note 10. As a result, the demand for Cenvat credit on MS Drums was upheld, and the appellant was instructed to pre-deposit the demanded amount within a specified timeframe. The decision highlighted the importance of adherence to statutory provisions and the necessity for proper compliance with relevant regulations in availing credits and determining duty liabilities.

This detailed analysis encapsulates the legal nuances and key points of the judgment, emphasizing the Tribunal's reasoning and decision regarding the issues raised in the case.