2013 (10) TMI 793 - AT - Central Excise

CENVAT Credit Waiver of Pre-deposit - Whether the appellant is eligible for CENVAT credit of central excise duty paid on M.S. Angles, Channels etc. used for supporting structures of Machineries/equipments in their factory Held that - The issue is contentious and at the same time it cannot be said that a case has been made out for a total waiver - the appellant is directed to deposit 50% of the total CENVAT credit demanded upon submission of the same there shall be waiver of pre-deposit of balance dues and stay against recovery during the pendency of appeals Partial stay granted.

Summary

Issues involved:
1. Eligibility for CENVAT credit of central excise duty paid on M.S. Angles, Channels used for supporting structures of Machineries/equipments in the factory.
2. Applicability of normal period for show-cause notices.
3. Interpretation of previous judgments regarding CENVAT credit on specific materials.
4. Requirement for depositing a percentage of total CENVAT credit demanded.

Eligibility for CENVAT credit:
The issue in question pertains to the eligibility of the appellant for CENVAT credit on central excise duty paid on M.S. Angles, Channels utilized for supporting structures of Machineries/equipments in their factory. The counsel argues that the orders, although separate, are related to 50% of the credit taken in two different orders, hence suggesting a common treatment for both appeals. The Tribunal finds the issue contentious, with references made to previous decisions such as the Vandana Global Ltd. case and the A.P. Paper Mills Ltd. case. Notably, the Tribunal acknowledges the challenge to the Vandana Global Ltd. decision in the High Court of Chattisgarh. The counsel distinguishes the case from the Hon'ble Supreme Court's ruling in the Saraswati Sugar Mills case, emphasizing that the issue before the Supreme Court was the eligibility of an exemption notification, not the admissibility of CENVAT credit.

Applicability of normal period for show-cause notices:
Both show-cause notices were issued within the normal period, without invoking any extended period or imposing penalties. The demand is solely for the CENVAT credit availed along with interest, indicating compliance with the procedural requirements regarding the issuance of notices.

Interpretation of previous judgments:
The counsel highlights the contentious nature of the issue, referencing the Larger Bench decision in the Vandana Global Ltd. case and the Tribunal's stance in the A.P. Paper Mills Ltd. case. The Tribunal acknowledges the challenge to the Vandana Global Ltd. decision and the differing interpretations of the Hon'ble Supreme Court's ruling in the Saraswati Sugar Mills case. The Tribunal finds the issue complex and not suitable for a total waiver, directing the appellant to deposit 50% of the total CENVAT credit demanded in both appeals within a specified timeline.

Requirement for depositing a percentage of total CENVAT credit demanded:
After considering arguments from both sides, the Tribunal deems the issue contentious but not warranting a complete waiver. Consequently, the appellant is instructed to deposit 50% of the total CENVAT credit demanded in both appeals within a specified period. Compliance is to be reported by a set date, with the provision for a waiver of pre-deposit on the remaining dues and a stay against recovery during the pendency of the appeals.