2013 (8) TMI 64 - AT - Central Excise

Pre-deposit Stay application Clandestine removal - Contentions raised by Ld. Counsel that even in the case of clandestine removal, various judicial for as have taken a view that the benefit of CENVAT Credit of the duty paid on the inputs cannot be denied There are various decisions holding that while arriving at duty liability, the amount which has been considered as a value, be considered as cum-duty price and duty liability should be worked back - Entire issue needs to be gone into detail, which can be done only at the time of final disposal of appeals - Appellant has not made out a prima facie case for complete waiver of the pre-deposit of the amounts involved - Direct the main assessee M/s Shubham Polymers to pre-deposit an amount of Rs.15 lakhs (Rupees Fifteen Lakhs only) within a period of eight weeks Decided against the Assessee.

Summary

Issues:
Waiver of pre-deposit of duty, interest, and penalties in Stay Petitions regarding charge of clandestine removal.

Analysis:
The judgment involves three Stay Petitions seeking waiver of pre-deposit of duty, interest, and penalties related to the charge of clandestine removal. The appellant's counsel argued that the authorities did not consider the availability of CENVAT Credit on inputs used for manufacturing the final product deemed clandestinely removed. Additionally, the cum-duty price of goods cleared from the factory premises was not taken into account by the lower authorities. The Departmental Representative reiterated the findings of the lower authorities. The Tribunal acknowledged the findings of clandestine removal by the lower authorities but also noted the judicial view that the benefit of CENVAT Credit on duty paid inputs should not be denied even in cases of clandestine removal. The Tribunal emphasized the need for a detailed examination of the issue during the final disposal of appeals. While the appellant did not establish a prima facie case for complete waiver of pre-deposit, the Tribunal directed the main assessee to pre-deposit Rs.15 lakhs within eight weeks and report compliance. Upon compliance, the application for waiver of the remaining amounts was allowed, and recovery stayed until the appeal's disposal.

This judgment underscores the importance of considering CENVAT Credit on inputs and cum-duty price in cases of clandestine removal. It highlights the Tribunal's approach of requiring a detailed examination of issues during the final disposal of appeals rather than granting complete waiver of pre-deposit based on prima facie cases. The decision to direct the main assessee to pre-deposit a specific amount before further consideration demonstrates a balanced approach to addressing the issues raised in the Stay Petitions.