2010 (9) TMI 609 - AT - Central Excise

Waiver of pre-deposit - Cenvat credit - Inputs not used for manufacture of product - The appellants have availed of huge amount of input duty credit , without the inputs being transported to the appellant s, factory and without the same being used for manufacture of finished goods - The burden of proof in respect of eligibility to input duty credit is squarely on the appellants - find prima facie merit in the case made out by the Department and the view that by issuance of show-cause notice, by fixing personal hearing on various dates and by supplying relevant documents, the Department has prima facie given adequate opportunity to the appellants to defend themselves which they have not availed of - Hence, direct the appellant, to predeposit 50% of the duty amount - predeposit of the balance amount of duty as well as penalty imposed on the appellant shall remain waived.

Summary

Issues:
1. Modification of stay order due to non-appearance of the appellants.
2. Allegation of violation of natural justice in passing the impugned order.
3. Adequacy of time given for representation before the adjudicating Commissioner.
4. Non-receipt of relevant documents hindering effective representation.
5. Argument for waiver of pre-deposit based on violation of natural justice.
6. Burden of proof on appellants regarding eligibility for input duty credit.
7. Prima facie view of the Department's thorough investigation.
8. Decision on pre-deposit requirement and further hearing.

Analysis:

1. The appellants filed a miscellaneous application for modification of a stay order due to their non-appearance on a scheduled date. The Tribunal allowed the appellants' advocate to argue for waiver of pre-deposit to prevent unfair consequences.

2. The appellants alleged that the impugned order was passed in violation of natural justice. The Tribunal cited the need for principles of natural justice but emphasized the appellants' burden to prove eligibility for input duty credit.

3. The appellants claimed inadequate time for representation before the adjudicating Commissioner. However, the Tribunal noted that the appellants had sufficient time between document supply and the hearing dates to prepare a defense.

4. Non-receipt of relevant documents was raised as an issue hindering effective representation. The Tribunal found that most documents were provided in time and questioned how the delay affected the appellants' defense.

5. The argument for waiver of pre-deposit centered on the alleged violation of natural justice. The Tribunal considered the appellants' contentions but emphasized the need for the appellants to demonstrate entitlement to the input duty credit.

6. The Tribunal highlighted the burden of proof on the appellants regarding eligibility for input duty credit. The Department alleged misuse of credit without proper transportation and utilization for finished goods.

7. The Department's thorough investigation was noted, although not exhaustive. The Tribunal found prima facie merit in the Department's case based on the evidence presented.

8. The Tribunal decided that a pre-deposit was necessary as a condition for further hearing. The appellants were directed to pre-deposit 50% of the duty amount within a specified period, subject to compliance for waiver of the remaining amount and penalties.

This detailed analysis covers the issues raised in the judgment, providing a comprehensive overview of the Tribunal's decision and reasoning.