2013 (10) TMI 1247 - AT - Central Excise

Reversal of Cenvat credit Waiver of Pre-deposit - Whether Goods Manufactured are inputs or capital goods OR not - plates, angles, channels etc. falling under Chapter 72 of Central Excise Tariff were sued in the supportive structures - Held that - The appellant was entitled to entertain a bonafide belief about their eligibility for CENVAT credit since during a portion of the relevant period there were contrary views taken by different Benches of the Tribunal which came to be finally decided against the assessee in the case of Vandana Global Ltd. Vs. Commissioner of Central Excise, Raipur 2010 (4) TMI 133 - CESTAT, NEW DELHI (LB) - the appellant had reversed the CENVAT credit and paid the interest on an assurance given by the audit party that if the CENVAT credit and interest are paid, no further proceedings will be initiated - assessee has made out a prima facie case for stay against the recovery during the pendency of the appeal Stay granted.

Summary

Issues:
1. Early hearing of stay application.
2. Availing CENVAT credit on capital goods/inputs.
3. Demand for wrongly availed CENVAT credit, interest, and penalty.
4. Entitlement to bonafide belief and waiver of predeposit of penalty.

Analysis:

Issue 1: Early hearing of stay application
The appellant sought early hearing of the stay application due to the Superintendent of Central Excise's insistence on penalty payment pending the stay petition's disposal. The Tribunal allowed the early hearing application and decided to take up the stay application for final disposal on the same day, despite the respondent's opposition.

Issue 2: Availing CENVAT credit on capital goods/inputs
The appellant, engaged in manufacturing ERW steel tubes, was found to have wrongly availed CENVAT credit on capital goods/inputs from November 2008 to October 2010. The Revenue contended that the credit availed was incorrect as certain items used in supportive structures did not qualify as inputs or capital goods. The appellant reversed the CENVAT credit with interest upon this revelation. Subsequently, a demand for the wrongly availed credit, interest, and penalty was made.

Issue 3: Demand for wrongly availed CENVAT credit, interest, and penalty
A demand for Rs. 4,74,382/- towards wrongly availed CENVAT credit was confirmed, along with interest of Rs. 1,09,343/- and a penalty equal to the CENVAT credit. The appellant argued that they had already paid the entire amount of duty liability with interest, questioning the issuance of a show-cause notice. The appellant claimed a bonafide belief in their eligibility for CENVAT credit, especially considering conflicting views by different Tribunal Benches prior to a final decision against the assessee.

Issue 4: Entitlement to bonafide belief and waiver of predeposit of penalty
The Tribunal acknowledged the appellant's bonafide belief, considering the conflicting views prior to a final decision against the assessee. The appellant's immediate action of debiting the duty amount with interest, without relying on limitation, demonstrated their bonafides. Consequently, the Tribunal waived the requirement of predeposit of penalty and granted a stay against its recovery during the appeal's pendency.

This detailed analysis of the judgment highlights the issues addressed by the Tribunal, the arguments presented by the parties, and the Tribunal's decision on each matter, ensuring a comprehensive understanding of the legal judgment.