2013 (1) TMI 120 - AT - Central Excise

CENVAT Credit in respect of goods cleared to SEZ developer - Held that - As decided in Sujana Metal Products Ltd. vs. CCE, Hyderabad (2011 (9) TMI 724 - CESTAT, BANGALORE) that goods cleared by a unit in DTA to SEZ developer should be considered to be goods exported by the former and should not be considered as exempted goods for purposes of Rule 6 of the CENVAT Credit Rules, 2004. However, in respect of the CENVAT credit denied to the assessee, they do not have prima facie case as not in dispute that the assessee took CENVAT credit amounting to Rs.8,46,004/- on inputs which were used by another unit of the company, which was a separate registered unit maintaining its own CENVAT account. The assessee having separate registration with separate CENVAT account prima facie did not have the right to claim CENVAT credit which was normally available to the other unit. Thus the appellant is liable to make pre-deposit of the entire CENVAT credit amount before the Commissioner (Appeals) to enable him to dispose of their case on merits within four weeks and report compliance on or before 7.2.2013.

Summary

Issues:
1. Waiver and stay of adjudged dues sought by the appellant.
2. Demand of duty and CENVAT credit, interest, and penalties by the original authority.
3. Appeal to the Commissioner (Appeals) and application for waiver of pre-deposit.
4. Prima facie entitlement to benefit of Tribunal's decision.
5. Requirement of pre-deposit for CENVAT credit amount.
6. Disposal of stay application and remand of the appeal.

Analysis:
The appellant sought waiver and stay of the adjudged dues, which was considered for summary disposal by the Appellate Tribunal CESTAT Bangalore. The original authority had demanded duty amounts and CENVAT credit, interest, and penalties for various periods. The appellant appealed to the Commissioner (Appeals) and applied for waiver of pre-deposit, but failed to comply with the prescribed pre-deposit amount within the specified time, leading to dismissal of the appeal for non-compliance with Section 35F of the Central Excise Act.

Upon careful consideration, the Tribunal found that the appellant was entitled to the benefit of a previous decision regarding goods cleared to SEZ developer. It was held that goods cleared to SEZ developer should not be considered as exempted goods for CENVAT Credit Rules. However, regarding the CENVAT credit denied to the appellant for inputs used by another unit of the company, the Tribunal found that the appellant did not have a prima facie case. Since the appellant had a separate registered unit with its own CENVAT account, they were required to make a pre-deposit of the entire CENVAT credit amount before the Commissioner (Appeals) for further proceedings.

In light of the above, the Tribunal directed the appellant to pre-deposit a specific amount within a stipulated time frame and report compliance to the Commissioner (Appeals) for the disposal of the appeal on its merits. The Tribunal allowed the appeal by way of remand and disposed of the stay application. It was emphasized that the observations on prima facie case should not influence the decision of the Commissioner (Appeals) in any manner, ensuring a fair hearing for the appellant during the proceedings.