2012 (9) TMI 79 - HC - Central Excise

Waiver of pre-deposit Cenvat credit Held that - KPIPL had never taken any delivery of material and they had never manufactured PVC compound and PVC Master Batches, which were allegedly sold to appellant - appellant had during this period allegedly purchased several consignments of PVC compound, etc. from KPIPL and had also availed cenvat credit - appellant shall deposit 50% of the cenvat credit

Summary

Issues Involved:
Appeal under Section 36G of the Central Excise Act, 1944 challenging the order of the Customs Excise and Service Tax Appellate Tribunal directing the appellant to deposit Rs. 50 lakhs as a pre-condition for hearing the appeal on merits.

Detailed Analysis:

1. Allegation of Wrongly Availed Cenvat Credit:
The appellant was alleged to have wrongly availed cenvat credit of Rs. 72,56,374 on the purchase of PVC compound and PVC Master Batches from a specific company. The company in question was accused of diverting CP 172 SG resin to third parties instead of manufacturing the products. Statements from drivers and owners of vehicles delivering goods supported this allegation. The company was found without machinery for manufacturing during a search.

2. Contentions of the Appellant:
The appellant argued that the specific company did not name them directly in any admission. They pointed out that the company had previously been found with excess PVC compound and PVC Master Batches during a search in 2004. The appellant claimed that truck drivers' statements did not support the Revenue's case and argued that they were not responsible for the alleged lapses of the company.

3. Observations and Orders:
The court observed that the company had never taken delivery of materials or manufactured the products allegedly sold to the appellant. The appellant had purchased several consignments during the period in question and availed cenvat credit. The court modified the Tribunal's order, directing the appellant to deposit 50% of the cenvat credit amount in two equal installments for the appeal to be heard.

4. Decision and Conclusion:
Considering the nature of the dispute and contentions raised, the court allowed the appeal to proceed upon the specified deposits. The judgment did not award costs in this case.

This detailed analysis covers the issues involved in the legal judgment, including the allegations, contentions, observations, and the final decision made by the court.