2011 (10) TMI 224 - AT - Central Excise

Waiver of Pre Depost of Duty Interest - Assessee pleaded no credit has been availed in respect of input used in manufacture of exempted goods - Held - Facts requires verification - order set aside after waiving pre-deposit of duty, interest and penalty and the matter is remanded to the adjudicating authority to decide afresh

Summary

Issues:
1. Waiver of pre-deposit of duty, interest, and penalty.
2. Availment of credit of duty paid on common inputs.
3. Contention regarding no credit availed for inputs used in the manufacture of exempted goods.
4. Lack of evidence to support the claim.
5. Decision to set aside the impugned order and remand the matter for fresh adjudication.

Analysis:
1. The applicant filed for the waiver of pre-deposit of duty, interest, and penalty amounting to Rs.1,71,429. The demand was confirmed due to the applicant availing credit of duty paid on common inputs used in or in relation to the manufacture of final products cleared at nil rate of duty. The applicant was held liable to pay 10% of the price on exempted goods as per Rule 6(3)(b) of the Cenvat Credit Rules.

2. The applicant contended that they had not availed any credit for inputs used in the manufacture of exempted goods. The Assistant Commissioner in a previous order had dropped the demand on the same grounds, acknowledging that no credit had been availed for such inputs. However, the Revenue argued that the applicant failed to provide evidence to support their claim, which led to the Commissioner (Appeals) upholding the demand due to the lack of data regarding inputs for exempted goods.

3. The Tribunal found merit in the applicant's claim that no credit had been availed for inputs used in the manufacture of exempted goods. Given the previous order dropping the demand on similar grounds and the consistent plea from the applicant, the Tribunal set aside the impugned order, waived the pre-deposit, and remanded the matter for fresh adjudication by the adjudicating authority after affording an opportunity of hearing to the appellant.

4. The decision to set aside the impugned order and remand the matter for fresh adjudication indicates the Tribunal's recognition of the need for verification regarding the applicant's claim of not availing credit for inputs used in the manufacture of exempted goods. The stay petition was allowed, and the appeal was disposed of by way of remand, emphasizing the importance of proper verification and due process in such matters.

In conclusion, the judgment highlights the significance of providing evidence to support claims in tax matters, the role of previous orders in influencing decisions, and the Tribunal's commitment to ensuring a fair adjudication process by remanding the matter for further examination based on the presented arguments and evidence.