2013 (11) TMI 844 - AT - Central Excise

Distribution / bifurcation of cenvat credit amongst storage tanks and structures - Waiver of Pre-deposit of duty and penalty under Rule 15 (2) of cenvat credit rules r.w. Section 11AC of CEA,1944 Held that - Prima facie, the applicant s case relating to storage tanks involved a total credit of Rs.17.17 Crores and claimed to be relating to Storage Tank - on a verification report submitted by the Department, it is claimed by the Revenue that from the said Rs.17.17 crores, around Rs.9.74 crores relates to structural - at this stage, it would be difficult to say that what quantum of Cenvat Credit relatable to Storage Tanks and structures - This has gone to laying down of storage tank in their factory for Cenvat Credit on pipes and fittings following Commr.of Central Excise, Chennai Vs. Pepsico India Holdings Ltd. 2000 (10) TMI 122 - CEGAT, CHENNAI relying upon Vandana Global Ltd. Versus CCE 2010 (4) TMI 133 - CESTAT, NEW DELHI (LB) for demand of Cenvat Credit related to structural, pre-deposit is directed for normal period of limitation assesse directed to submit Rupees One Crore as pre-deposit upon such submission rest of the duty to be waived till the disposal Partial stay granted.

Summary

Issues:
- Waiver of pre-deposit of Cenvat Credit and penalty imposed under Rule 15(2) of Cenvat Credit Rules read with Section 11AC of CEA, 1944.

Analysis:
The judgment involved an application seeking waiver of pre-deposit of Cenvat Credit amounting to Rs.26.57 crores and an equal penalty imposed under Rule 15(2) of Cenvat Credit Rules along with Section 11AC of CEA, 1944. The appellant's representative argued that the denied Cenvat Credit comprised components related to storage tanks, pipes fittings, internal pipe tanks, and various input services. They cited precedents to support their claims, such as the decision of the Hon'ble Karnataka High Court and judgments from other High Courts. The appellant emphasized that any direction for pre-deposit would cause undue hardship due to significant accumulated losses. On the other hand, the Revenue's representative contended that pre-deposit should be directed based on past Tribunal orders and the inability of the appellant to discharge the burden required under Rule 9 of the Cenvat Credit Rules. The Revenue also argued against the admissibility of Cenvat Credit on certain items and structures, referencing relevant case law and rules. The Tribunal, after hearing both sides and examining the records, found it challenging to determine the exact quantum of Cenvat Credit relating to storage tanks and structures at that stage. They acknowledged the arguments presented by both parties regarding the availability of Cenvat Credit on pipes and fittings, as well as various input services. Considering the financial condition of the appellant and the interests of the Revenue, the Tribunal directed a deposit of Rs.1.00 Crore within four weeks, with the balance dues adjudged to be waived and recovery stayed during the appeal's pendency.

This comprehensive analysis covers the issues involved in the judgment, detailing the arguments presented by both parties, the legal precedents cited, and the Tribunal's decision regarding the waiver of pre-deposit of Cenvat Credit and penalty.