2012 (11) TMI 263 - AT - Central Excise

Cenvat Credit - Waiver of pre-deposit, interest thereof and penalties - Held that - the current appellant is on the same footings, as other vendors and there cannot be any proceeding against the appellant for availing CENVAT Credit only on the ground that there was suppression of facts by Manufacturer while paying the amount through supplementary invoices - application for waiver of pre-deposit of the amounts involved is allowed and recovery thereof stayed till the disposal of appeal.

Summary

Issues: Stay petition for waiver of pre-deposit of Central Excise duty, interest, and penalties under Rules 15(1) and 25(1) of Central Excise Rules, 2002.

Detailed Analysis:

1. Issue of Eligibility for CENVAT Credit:
The appellant filed a Stay Petition seeking waiver of pre-deposit of Rs.29,38,166/-, interest, and penalties under Central Excise Rules. The amounts were confirmed by the adjudicating authority due to the appellant allegedly not being eligible to avail CENVAT Credit of duty paid by M/s Hero Honda Motors Ltd on supplementary invoices. The authorities invoked the extended period of limitation alleging suppression and misstatement. The appellant argued that a Show Cause Notice against M/s Hero Honda Motors Ltd was dropped by the Commissioner, Central Excise, Delhi-III, indicating that the appellant should not be penalized for availing the credit based on the same transactions. The Tribunal noted that there was no dispute regarding the receipt and consumption of materials covered under the supplementary invoices by the appellant, and similar vendors of M/s Hero Honda Motors Ltd were allowed to avail CENVAT Credit by the Commissioner in a separate case.

2. Application of Precedent and Tribunal's Decision:
The Department reiterated the findings of the adjudicating authority and cited the decision in the case of Australian Foods India Pvt. Ltd. and Toshi Auto India Pvt. Ltd. The Tribunal carefully considered the arguments from both sides and examined the records. It acknowledged the absence of dispute regarding the credit availed based on the supplementary invoices and the utilization of materials by the appellant. The Tribunal found merit in the appellant's contention that vendors similarly placed as the appellant were permitted to avail CENVAT Credit by the Commissioner in a previous order. Consequently, the Tribunal concluded that the appellant had established a case for the waiver of pre-deposit of the disputed amount.

3. Decision on Stay Petition and Recovery:
After thorough consideration, the Tribunal granted the application for waiver of pre-deposit of the amounts involved. It ordered the stay of recovery of the disputed amount until the disposal of the appeal, recognizing the appellant's arguments and the precedent set by the Commissioner in similar cases. The decision highlighted the importance of fairness and consistency in the application of tax laws and credits, ensuring that similarly situated parties are treated equitably.

In conclusion, the judgment by the Appellate Tribunal CESTAT Ahmedabad allowed the appellant's Stay Petition for the waiver of pre-deposit of Central Excise duty, interest, and penalties, emphasizing the need for consistency and fairness in dealing with CENVAT Credit issues and acknowledging the appellant's case based on established precedents and factual circumstances.