2012 (12) TMI 708 - AT - Central Excise

Receipt of finished goods not mentioned in RG-1 maintained for the new factory - factory of assessee shifted to new premises - seeking waiver of pre-deposit of dues - Held that - There is a clear finding of the original authority that the assesseee has disposed of the said goods to customers after proper packing and payment of duty utilizing the CENVAT credit taken by them - That being the case, prima facie case in favour of the assessee on this issue. Issue of credit on input services, prima facie, is settled in favour of the assessee in view of the Stay Order in the case of M/s. Superpacks vs Commissioner of Central Excise, Bangalore - there shall be waiver of predeposit of dues as per the impugned order and stay of recovery thereof till the disposal of the appeal.

Summary

Issues:
1. Duty demand on finished goods transferred to new premises
2. CENVAT credit on common input services

Analysis:

Issue 1: Duty demand on finished goods transferred to new premises
The appellant shifted their factory to a new premises and transferred finished goods from the old premises by raising invoices and paying duty. However, they did not promptly record the receipt of these goods in the new factory's records, leading to a demand of approximately Rs.7.49 lakhs. Additionally, there was a demand of Rs.2,19,336 for taking CENVAT credit related to input services common to trading and manufacturing activities. The original authority confirmed a total demand of Rs.9,69,221 along with interest and penalty, which was upheld by the Commissioner (Appeals).

Analysis of Submissions:
The appellant argued that the transfer of finished goods from old to new premises, followed by packing and clearance after payment of duty using CENVAT credit, constituted a revenue-neutral exercise. They contended that any violation was procedural. Regarding the credit on common input services, the appellant relied on a Stay Order in a similar case and sought waiver of the demand.

Tribunal's Decision:
After considering both sides and reviewing the records, the Tribunal found that the appellant had indeed disposed of the goods to customers after proper packing and payment of duty using CENVAT credit. Therefore, the Tribunal found a prima facie case in favor of the appellant on this issue. Additionally, the Tribunal noted that the issue of credit on input services was settled in favor of the appellant based on the cited Stay Order. Consequently, the Tribunal decided to waive the predeposit of dues as per the impugned order and stayed the recovery until the appeal's disposal.