2013 (11) TMI 78 - AT - Central Excise

Waiver of Pre-deposit of Interest availing depreciation while availing cencat credit - capital goods - The original authority disallowed the credit and also allowed to re-credit the same as they have filed the revised return - Relying upon Yee Kay Technocrat (P) Ltd. Vs. CCE 2011 (1) TMI 544 - CESTAT, NEW DELHI - Prima facie they have to pay interest for the period - the applicant is directed to deposit a sum of Rs.30,000 towards interest - Upon such deposit, pre-deposit of the balance interest and penalty would be waived and recovery stayed during the pendency of the appeal Partial stay granted.

Summary

Issues:
1. Waiver of pre-deposit of interest and penalty on availed credit of capital goods.

Analysis:
The judgment revolves around the application for waiver of pre-deposit of interest and penalty amounting to Rs.67,320/- concerning the availed credit of Rs.1,24,302/- on capital goods by the applicant. The applicant had initially availed the credit during specific periods and subsequently filed a revised Income Tax return due to an audit detecting irregularities. The original authority confirmed the demand and ordered recovery of interest from the date of credit availed. The crux of the issue lies in whether the applicant is liable to pay interest for the period in question despite filing a revised return.

The learned counsel representing the applicant argued that the revised return was filed, making them eligible to avail the credit, and thus, the imposition of interest was incorrect. The counsel relied on a Tribunal decision in a similar case to support this stance. Conversely, the learned AR contended that while the original authority disallowed the credit initially, it was later allowed to be re-credited upon filing the revised return, necessitating the payment of interest for that period along with a penalty. The AR referred to a Tribunal decision in another case to bolster this argument.

After careful consideration of both sides' submissions, the judge found that the original authority disallowed the credit initially but permitted its re-credit upon the filing of the revised return. Consequently, the judge opined that prima facie, the applicant is liable to pay interest for the relevant period. As a result, the applicant was directed to deposit Rs.30,000/- towards interest within four weeks, with the waiver of the balance interest and penalty contingent on this deposit. The recovery of the waived amount was also stayed during the pendency of the appeal, providing temporary relief to the applicant.

In conclusion, the judgment delves into the intricacies of availing credit on capital goods, the implications of filing revised Income Tax returns, and the subsequent obligations regarding interest and penalties. The decision underscores the importance of compliance with tax regulations and the consequences of irregularities detected during audits, offering a nuanced resolution to the specific issues raised in the case.