2013 (11) TMI 541 - AT - Central Excise

Denial of Cenvat credit Waiver of Pre-deposit - Revenue was of the view that the oxygen generating plant would be an immovable property and also on the ground that the plant is not owned by the appellant but has been leased out Held that - If good is a capital good, Rule 57Q is applicable enabling party to claim credit of duty paid on capital goods by the manufacturer of specified goods - A manufacture is entitled to claim Credit on account of the excise paid on the components, spares and accessories of the goods exempt. Following COMMISSIONER OF CENTRAL EXCISE Versus GUJRAT AMBUJA CEMENT LTD. 2008 (10) TMI 363 - HIMACHAL PRADESH HIGH COURT the appellant have made out a prima facie case - there being no dispute to the receipt and utilisation of the capital goods in the factory premises of the appellant, who is a manufacturer - the appellant has made out a case for the waiver of the pre-deposit of the amounts involved - applications for the waiver of pre-deposit of the amounts allowed and recovery stayed till the disposal stay granted.

Summary

Issues:
Waiver of pre-deposit of cenvat credit, interest, and penalty on ineligible items used for construction of oxygen generating plant.

Analysis:
The judgment addresses two stay petitions seeking the waiver of pre-deposit of cenvat credit, interest, and penalty amounting to Rs.2,70,87,651/- on items used for the construction of an oxygen generating plant. The denial of cenvat credit was based on the grounds that the plant could be considered immovable property and was leased by another entity. However, it was established that the capital goods in question were eligible for credit and were used in constructing the plant within the appellant's factory premises. The Tribunal noted a similar case involving the erection of an oxygen generating plant supplied by the same entity, where a prima facie case was established, leading to a waiver of pre-deposit. Given the identical nature of the facts and the absence of dispute regarding the utilization of the capital goods, the Tribunal concluded that the appellant had made a strong case for the waiver of pre-deposit, allowing the applications and staying the recovery until the appeal's disposal.