2009 (9) TMI 850 - AT - Central Excise

Issues Involved:
1. Demand of Rs. 3.7 crores - Cenvat credit availed and utilized by the appellant.
2. Demand of over Rs. 3.7 crores - Penalty under Rule 12/15 of the Cenvat Credit Rules, 2002/04 read with Rule 25 of the Central Excise Rules, 2002 read with Section 11AC of the Central Excise Act.
3. Waiver of pre-deposit and stay of recovery in respect of outstanding dues.
4. Demand of Rs. 2.99 crores - Cenvat credit on input services.
5. Demand of over Rs. 59 lakhs - Wrongly utilized by the assessee for payment of service tax on output services.
6. Demand of Rs. 12,44,967/- and pre-deposit requirement.

Analysis:

1. Demand of Rs. 3.7 crores: The appellant was demanded an amount equivalent to the Cenvat credit availed and utilized. A major part of this amount was related to Cenvat credit on input services. The appellant had transferred accumulated/unutilized credit to a single register under Rule 11 of the Cenvat Credit Rules, 2004. The show-cause notice was issued beyond the normal period of limitation, invoking the extended period due to suppression of material facts. However, the Tribunal found that the allegation of suppression of fact was not substantiated, leading to a waiver of pre-deposit and stay of recovery in respect of this amount based on the ground of limitation.

2. Penalty under Rule 12/15: Apart from the demand, a penalty of over Rs. 3.7 crores was imposed on the appellant under Rule 12/15 of the Cenvat Credit Rules, 2002/04 read with Rule 25 of the Central Excise Rules, 2002 read with Section 11AC of the Central Excise Act. The Tribunal did not examine this matter on merits in the judgment.

3. Waiver of Pre-deposit: The application sought waiver of pre-deposit and stay of recovery in respect of the outstanding dues. The Tribunal granted waiver and stay in relation to the demand of Rs. 2.99 crores based on the ground of limitation.

4. Demand of Rs. 2.99 crores: The demand was related to Cenvat credit on input services which remained unutilized and accumulated prior to a specific date. The appellant transferred the credit to a single register as per the transitional provision. The Tribunal found a prima facie case against this demand on the ground of limitation, leading to waiver of pre-deposit and stay of recovery.

5. Demand of over Rs. 59 lakhs: This demand was for wrongly utilizing the amount for payment of service tax on output services. The appellant argued that they should be deemed providers of the services based on Rule 2(r) of the Cenvat Credit Rules, 2004. The Tribunal found no effective rebuttal of the arguments and granted waiver and stay in respect of this demand.

6. Demand of Rs. 12,44,967/-: The appellant had already paid a portion of this demand. After considering submissions, the Tribunal did not find a prima facie case against this demand. The appellant was required to pre-deposit the balance amount, which was rounded off to Rs. 5 lakhs, within a specified period for waiver of pre-deposit and stay of recovery in respect of the balance of the adjudged dues. Compliance was to be reported by a specific date.

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