2013 (10) TMI 987 - AT - Central Excise

Waiver of pre-deposit Consignment wise payment of duty in cash - Rule 25 of Central Excise Rules, 2002 Revenue was of the view that Appellant did not pay the duty payable by cash, as per their ER-1 return by the due date - Neither did they pay it with interest Held that - Following Baba Viswakarma Engg. Co. (P) Ltd. Vs. CCEx., Ghaziabad 2012 (9) TMI 814 - CESTAT, NEW DELHI - Department has not taken the initiative to make use of the provisions regarding confiscation since no seizure has been effected - So the only consequence will be penalty - there is no case for demanding the duty paid through Cenvat credit to be paid again through cash/PLA - there is no case for imposing penalty equal to duty defaulted - Pre-deposit of all dues waived and its recovery stayed during the pendency of the appeal - Stay granted.

Summary

Issues:
Application for waiver of pre-deposit of duty and penalty under Rule 25 of Central Excise Rules, 2002.

Analysis:
The appellant filed an application seeking waiver of pre-deposit of 4.5 crores and a penalty of Rs.10.00 Lakhs imposed under Rule 25 of Central Excise Rules, 2002. The appellant's consultant argued that they mistakenly paid duty for February 2010 in March 2010 towards their Hyderabad unit, rectifying the payment later. Subsequently, from March to August 2010, they cleared finished goods using Cenvat Credit, contrary to Rule 8(3A) of the Central Excise Rules, 2002. The consultant cited the Tribunal's practice of allowing stay applications based on the judgment in Baba Viswakarma Engg. Co. (P) Ltd. Vs. CCEx., Ghaziabad, where using Cenvat Credit for duty discharge was deemed acceptable.

The Department's Assistant Commissioner contended that Rule 8(3A) mandates duty discharge through PLA during the default period, prohibiting Cenvat Credit utilization, referencing Precision Fasteners Ltd. Vs. Commissioner of Central Excise judgment by the Hon'ble High Court of Gujrat.

After hearing both parties and examining the records, the Tribunal noted its consistent practice of waiving pre-deposit of duty and penalty based on the precedent set by the judgment in Baba Viswakarma Engg. Co. (P) Ltd. case. Accordingly, the Tribunal waived the pre-deposit of all dues adjudged and stayed the recovery during the appeal's pendency. The stay petition was allowed.