2012 (12) TMI 148 - AT - Central Excise

Cenvat credit - waiver of pre deposit - duty paid inputs like steel plates for fabrication of various machinery, tanks etc. - held that - there is no dispute as regards the receipt of the plates and consumption thereof for fabrication of the storage tanks in the refinery. It is also seen that the said show cause notice is only on the ground that the appellant could not have availed the cenvat credit of the inputs which were received prior to 10.09.04. This adjudication order has attained the finality as department has not filed any appeal. Extending the same logic, prima-facie we find that there cannot be any dispute regarding the availment of cenvat credit by the appellant in this case as we have already recorded that there is no dispute as to receipt of the plates and the duty paid nature of the same and consumption thereof for the fabrication of storage tanks in the appellant s factory premises. - prima facie case in favor of assessee - stay granted.

Summary

Issues involved:
Waiver of pre-deposit of duty amount, interest, and penalty for ineligible cenvat credit on inputs received before registration as a factory.

Analysis:
The appellant sought a waiver for the pre-deposit of duty amount, interest, and penalty totaling Rs.7,56,56,794, which were confirmed as ineligible cenvat credit. The adjudicating authority held that the appellant failed to prove the consumption of inputs in their factory, leading to the denial of credit. The appellant argued that they began a refinery project in 1997-1998, procured duty-paid inputs like steel plates, and later availed cenvat credit upon registration in November 2008. They claimed to have consumed the plates for fabrication of storage tanks, providing details of consumption. The appellant's counsel referenced relevant case law and circulars to support their position that credit can be availed upon registration, even for inputs received earlier.

The authorized representative highlighted that the appellant did not respond to requests for stock details in 2007 and availed credit in 2010 without justification for the delay. She relied on a tribunal decision to argue against credit for inputs not in stock. After reviewing submissions, the Tribunal noted the appellant's receipt and consumption of steel plates during construction, with clarification provided to the authorities. The show cause notice primarily challenged the credit availed before a specified date, not the actual consumption. Referring to a previous adjudication order that favored the appellant on a similar issue, the Tribunal found no dispute on the receipt and utilization of plates for fabrication. Consequently, the Tribunal allowed the waiver of pre-deposit, stayed recovery, and scheduled an early hearing due to the substantial amount involved.

This judgment addressed the issue of pre-deposit waiver for cenvat credit on inputs received before factory registration. The Tribunal considered the appellant's timely clarification, lack of dispute on consumption, and precedence from a previous order in favor of the appellant. The decision emphasized the importance of registration for credit availment and the need for a correlation between receipt and utilization of inputs. The Tribunal's ruling provided relief to the appellant by allowing the waiver and stay of recovery pending appeal, demonstrating a fair and reasoned approach to the complex issue of cenvat credit eligibility.