2013 (8) TMI 536 - AT - Central Excise

Stay Application Waiver of Pre-deposit Appellant is purchaser in auction of items wherein winding up of a company is ordered by the Hon ble High Court of Gujarat - Cenvat credit of the excise duty paid on capital goods was allowed to an assessee from the year 1994 and hence there is an element of doubt as to whether they were eligible for cenvat credit of the capital goods purchased by them Held that - This issue needs to be gone into detail as Department is unable to produce any documents in support of his claim that these were no duty paid inputs lying in factory - Issue needs deeper consideration - Appellant s bank guarantee of Rs.5 lakhs were encashed in some other proceedings by the Revenue Authorities - Revenue Authorities encashed the bank gaurantee amount of Rs.5 lakhs, then the said amount if not returned to the appellant; keeping the same in mind, Appellant directed to deposit further an amount of Rs.5 lakhs - Subject to such compliance being reported to the Deputy Registrar, applications for the waiver of pre-deposit of the balance amounts involved are allowed and recovery thereof stayed till the disposal of appeals.

Summary

Issues: Stay petition for waiver of pre-deposit of duty demand, penalty, and interest; Liability of excise duty on waste and scrap generated during dismantling of machinery; Eligibility for cenvat credit on inputs and capital goods.

In this judgment by the Appellate Tribunal CESTAT AHMEDABAD, a stay petition was filed seeking the waiver of pre-deposit of duty demand, penalty, and interest. The case involved the liability of excise duty on waste and scrap generated during the dismantling of machinery purchased in an auction. The appellant argued that the waste and scrap were not liable for duty as per a Supreme Court decision in a similar case. The Revenue Authorities, however, maintained the duty liability. The Tribunal noted that the appellant was the highest bidder for the machinery and had dismantled it, invoicing the parts as scrap and waste. The issue of duty liability on the dismantled scrap was considered, along with the clearance of cenvat availed semi-finished goods. The Tribunal raised doubts about the eligibility of cenvat credit on capital goods and inputs, as the appellant failed to provide supporting documents. Consequently, the Tribunal directed the appellant to deposit a specified amount and report compliance, pending further consideration at the final disposal of the appeal.

Regarding the deposit amount, the appellant's bank guarantee had been encashed by the Revenue Authorities in another proceeding, which the Tribunal acknowledged. The appellant was instructed to deposit an additional amount within a specified timeframe. If the encashed amount was not refunded, the appellant was required to provide a new bank guarantee. The Tribunal allowed the waiver of pre-deposit for the balance amounts subject to compliance and stayed the recovery until the appeal's final disposal. The judgment emphasized the importance of compliance and the need for further investigation into the cenvat credit issue before making a final decision.