2013 (7) TMI 717 - AT - Central Excise

Waiver of Pre-deposit - CENVAT Credit of duty paid on M.S. plates, round bars and pipes, which were used for repair and maintenance in refinery Held that - Appellant had a bonafide belief and had taken the credit, relying upon the Stay Order in the case of HNG Float Glass Ltd. Vs CCE Vadodara 2013 (7) TMI 716 - CESTAT AHMEDABAD - and submit that it is a stay order passed in identical situation by Division Bench and hence it is binding on Single Member Bench. Also reliance is placed upon the Stay Order of the Principal Bench in the case of Bajaj Hindustan Ltd. Vs CCE Allahabad 2013 (7) TMI 671 - CESTAT NEW DELHI and submit that in that case, the Principal Bench has themselves granted unconditional stay on identical goods which were used for fabrication of machinery On bonafide belief as well as on merit, the appellant has a strong prima facie case, hence the Stay Petition be allowed Also, view has not been negated by lower authorities, nor any contrary evidence is produced - Appellant can avail the CENVAT Credit of the items like M.S. plates, round bars and pipes Stay granted - Waiver of pre-deposit allowed - Decided in favor of Assessee. Limitation - Credit was availed by the appellant in February, April and June 2009 while the show cause notice has been issued on 06.09.2011, which was received by the appellant on 26.09.2011 - Show cause notice is hit by limitation, in as much as the appellant has always informed the Department about CENVAT Credit having been availed by them.

Summary

Issues:
Waiver of in-eligible CENVAT Credit, interest, and penalty on Central Excise duty paid on certain items.

Analysis:
The appellant sought waiver of an amount deemed as in-eligible CENVAT Credit along with interest and penalty. The dispute arose from the appellant availing CENVAT Credit on M.S. plates, round bars, and pipes, which were considered non-capital goods. The appellant argued that these items were used for repair, maintenance of machinery, and manufacturing components like shafts, pumps, burners, etc., asserting they were capital goods. The appellant claimed a bonafide belief in eligibility for CENVAT Credit, citing prior tribunal decisions and stay orders in similar cases.

The Departmental Representative contended that the appellant failed to provide evidence of using the inputs for repair and maintenance. Reference was made to the judgment of a Larger Bench regarding the classification of the items as non-capital goods under Chapter 72. The key issue for consideration was whether the appellant correctly availed CENVAT Credit on the disputed items for repair and maintenance in a refinery.

Upon reviewing the submissions and records, the judge found that the appellant's consistent stance was not refuted by lower authorities, and no contradictory evidence was presented. The appellant had availed the CENVAT Credit during a period when tribunal decisions allowed such credits. The judge acknowledged the appellant's bonafide belief and referenced previous tribunal stay orders favoring the appellant's position. Consequently, the judge concluded that the appellant had a prima facie case for waiving the pre-deposit of the disputed amounts.

In light of the appellant's strong arguments and the precedent set by previous tribunal decisions, the judge allowed the application for waiver of the pre-deposit amounts and stayed the recovery until the appeal's final disposal.