2013 (11) TMI 941 - AT - Central Excise

Cenvat credit Waiver of Pre-deposit Held that - The appellant was keeping record for sending these items outside for job working after keeping the Department informed about the movements of the goods - the appellant has been filing regular returns as to the availment of CENVAT Credit - Prima face, the show cause notice hit by limitation - The appellant has made out a prima facie case for the waiver of pre-deposit of the amounts involved - The application for waiver of pre-deposit of amounts involved allowed till the disposal stay granted.

Summary

Issues:
Waiver of CENVAT Credit, interest, and penalty on M.S. plates, angles, nuts & bolts declared as capital goods.

Analysis:

1. Eligibility of CENVAT Credit:
The appellant sought waiver of CENVAT Credit, interest, and penalty amounting to Rs.11,42,241/-, which the adjudicating authority deemed ineligible as it was availed on items like M.S. plates, nuts & bolts declared as capital goods. The appellant consistently argued that these items were used for fabrication of parts of a furnace within their premises. The Tribunal observed that the appellant maintained records of sending these items for job working and had informed the Department about the movements. The Department did not dispute these facts. The appellant had been filing regular returns regarding CENVAT Credit availed. The show cause notice, issued after a significant period, seemed to be time-barred. The Tribunal found merit in the appellant's claim that the items were used for fabrication purposes, which was not disputed by the lower authorities.

2. Prima Facie Case for Waiver:
Considering the appellant's consistent stance, the Tribunal held that a prima facie case existed for waiving the pre-deposit of the amounts involved. The Tribunal noted that the appellant's argument regarding the utilization of M.S. plates, nuts & bolts for fabrication purposes in a new furnace was supported by evidence and not contested by the Department. Consequently, the Tribunal allowed the application for waiver of pre-deposit and stayed the recovery of the amounts until the appeal's final disposal.

In conclusion, the Tribunal ruled in favor of the appellant, granting the waiver of CENVAT Credit, interest, and penalty on the grounds that the appellant had demonstrated a prima facie case for the waiver. The Tribunal highlighted the appellant's consistent position on the utilization of the disputed items for fabrication purposes, supported by records and lack of dispute from the Department. The Tribunal also raised concerns about the show cause notice being potentially time-barred. As a result, the recovery of the amounts was stayed pending the appeal's final resolution.