2013 (10) TMI 1137 - AT - Central Excise

Waiver of MODVAT Credit and Penalty under Rule 57U of the CE Rules Reversal of CENVAT credit - Held that - The evidence produced by the Applicant stating reversal of the CENVAT Credit - Prima facie the Applicant has reversed the entire amount of CENVAT Credit of Rs.1.03 crore - the Applicant has deposited the entire amount of CENVAT Credit confirmed pre-deposit of the said amount is sufficient for hearing of the Appeal Pre-deposit of the balance dues waived and its recovery stayed during pendency of the Appeal - Stay granted.

Summary

Issues:
Waiver of MODVAT Credit and penalty under Rule 57U of the Central Excise Rules, 1944.

Analysis:
The Applicant filed an Application seeking waiver of MODVAT Credit amounting to Rs.1.03 crore and an equal amount of penalty imposed under Rule 57U of the Central Excise Rules, 1944. The Applicant had reversed the entire amount of CENVAT Credit in May 2012 after filing the Appeal before the Tribunal. The Advocate for the Applicant submitted evidence of the reversal by enclosing a copy of the relevant extract of the CENVAT Credit Register. On the other hand, the Revenue's representative raised concerns about the payment made after the Order-in-Original and the filing of the Appeal, emphasizing the need for verification.

Upon reviewing the evidence presented by the Applicant regarding the reversal of the CENVAT Credit, the Tribunal found prima facie that the Applicant had indeed reversed the entire amount of CENVAT Credit of Rs.1.03 crore. Considering this, the Tribunal concluded that the predeposit of the confirmed amount was sufficient for the Appeal to be heard. Consequently, the Tribunal decided to waive the predeposit of the balance dues adjudged and stayed its recovery during the pendency of the Appeal. The Stay Petition was allowed with a clear directive that if the Revenue later discovered that the Applicant had not deposited the said amount, they could approach the Tribunal for appropriate action. The Tribunal disposed of the Stay Petition with these terms, ensuring clarity and fairness in the process.

This judgment highlights the importance of compliance with predeposit requirements in appeals related to tax matters and the significance of providing clear evidence to support claims of credit reversal. It also underscores the Tribunal's role in ensuring procedural fairness by allowing waivers based on verified evidence while maintaining the option for the Revenue to seek redress if necessary.