2013 (10) TMI 264 - AT - Central Excise

Availment of Cenvat Credit - Waiver of Pre-deposit The adjudicating authority has denied the credit on the ground that various iron and steel items supplied by the appellant to M/s. Machmet India Ltd. for laying down the foundation of conveyor belts, do not stand used by them and further the same are used for laying down the foundation which are attached to earth and cannot be said to be cenvatable items - Held that - The issue is arguable and contentious the appellant has not been able to make out a good prima facie case in its favour so as to allow the stay petition unconditionally - We further note that no financial hardship stand pleaded before us - Partial Stay granted.

Summary

Issues:
- Dispensing with the condition of pre-deposit of duty and penalty
- Availment of Cenvat credit on raw materials and capital goods
- Denial of credit by the adjudicating authority
- Contentious issues of demand limitation and financial hardship
- Direction for depositing a specific amount towards duty

Dispensing with Pre-deposit:
The appellant sought to dispense with the condition of pre-deposit of duty and penalty amounting to Rs.6,96,29,549/- confirmed against them. The dispute arose from the denial of Cenvat credit on raw materials supplied by the appellant for the manufacture of conveyor components and structural conveyor foundations. The adjudicating authority rejected the credit claim, leading to the confirmed demand.

Availment of Cenvat Credit:
The appellant, engaged in cement manufacturing, supplied raw materials to a manufacturer under an agreement. The disagreement centered on the eligibility of Cenvat credit on these raw materials and certain items claimed as capital goods. The adjudicating authority contended that the items supplied were not used as cenvatable items, leading to the denial of credit.

Contentious Issues:
The tribunal identified the disputed issues as arguable and contentious, particularly regarding the demand limitation and financial hardship. The appellant's plea for unconditional stay was not accepted due to the lack of a strong prima facie case in their favor. Despite the absence of financial hardship claims, the tribunal directed the appellant to deposit Rs.2,00,00,000/- towards duty within 8 weeks, with the balance of duty and penalty being waived and recovery stayed during the appeal.

Direction for Deposit:
In the absence of a strong prima facie case and financial hardship claims, the tribunal directed the appellant to deposit a specific amount towards duty within a specified period. This deposit condition was set to allow the waiver of the remaining duty balance and the penalty, with the recovery of these amounts stayed during the appeal process.

This judgment highlights the importance of complying with pre-deposit conditions in tax disputes, the criteria for availing Cenvat credit, and the tribunal's discretion in balancing the interests of the parties involved.