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2012 (12) TMI 546 - AT - Central ExciseQuantification of demand - assessee is disputing the computation of the demand Held that - Full value of machinery items which are traded, is taken into consideration whereas as per the provisions of Rule 6 of the Cenvat Credit Rules, the value in case of trading shall be different between the sale price of the cost of goods sold or 10% of the cost of goods, whichever is more - demand is not sustainable - amount already deposited is sufficient for hearing of the appeal. The pre-deposit of the remaining amount of duty, interest and penalty is waived. Stay petition allowed.
Issues: Application for waiver of pre-deposit of duty, interest, and penalty; Dispute over quantification of demand; Interpretation of Rule 6 of the Cenvat Credit Rules.
The judgment involves an application for the waiver of pre-deposit of duty, interest, and penalty amounting to Rs. 78,08,852. The applicant had paid a partial amount already. The dispute arose from the denial of credit of service tax paid on the input service, specifically advertisement. The Revenue contended that the applicant, engaged in manufacturing and trading packing material and machinery, advertised for both categories of goods. However, the applicant argued that their advertisement was solely for packing material, not machinery, and had reversed the cenvat credit for trading activity. They applied Rule 6(3d) to calculate the value of trading as exempted service. The Revenue maintained that the advertisement covered both manufactured and traded goods, justifying the demand. The core issue revolved around the quantification of the demand. The applicant did not contest the merits but challenged the computation. They argued that the value of machinery items for trading should be based on the sale price or 10% of the cost of goods sold, as per Rule 6 of the Cenvat Credit Rules. The Tribunal found the deposited amount sufficient for the appeal hearing and waived the pre-deposit of the remaining duty, interest, and penalty. The stay petition was allowed based on the provisions of the Cenvat Credit Rules, determining the demand as unsustainable due to incorrect quantification.
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