2013 (11) TMI 1109 - AT - Central Excise

Eligibility for Cenvat credit Extended Period of Limitation - Waiver of Pre-deposit Penalty under Rule 15 (1) of the Cenvat Credit Rules, 2004 - Applicants have used MS Angles/Bars/Beams etc. and treating the same as capital goods as defined under Rule (2) (a) of Cenvat Credit Rules, 2004 - Held that - Following Vandana Global Ltd. Versus CCE 2010 (4) TMI 133 - CESTAT, NEW DELHI (LB) - CENVAT credit is admissible in case of materials similar to the ones used by the appellants for supporting structures/fabrication of machinery within the factories here extended period could not have been invoked - The appellants have made out a prima facie case on limitation Pre-deposit of 25% of the duty to be submitted - upon such submission rest of the duty to be stayed till the disposal Partial stay granted.

Summary

Issues:
Waiver of pre-deposit of Cenvat Credit and penalty under Rule 15(1) of Cenvat Credit Rules, 2004.

Analysis:
The case involved an application seeking waiver of pre-deposit of Cenvat Credit and penalty amounting to Rs.3,25,52,784 imposed under Rule 15(1) of the Cenvat Credit Rules, 2004. The applicants, engaged in manufacturing 'Iron & Steel Products,' had availed Cenvat Credit on items like MS Angles/Bars/Beams treated as 'capital goods.' Show cause notices were issued disputing the classification of these items as capital goods. The Ld. Sr. Advocate argued that a significant portion of the demand was time-barred, offering to deposit 25% of the amount related to the demand for the normal period. The Revenue's Ld. A.R. reiterated the findings of the Ld. Commissioner (Appeals).

The Tribunal considered the period from February, 2004 to July, 2009, and noted its consistent view in cases involving availment of Cenvat Credit on items like Angles, Channels, Beams as capital goods. Referring to the principles laid down by the Larger Bench of the Tribunal in a previous case, the Tribunal directed the applicant to make a pre-deposit of 25% of Rs.2.07 Crores within eight weeks. Compliance was to be reported by a specified date. Upon compliance, the balance amount of dues would be waived, and recovery stayed during the appeal's pendency. Failure to deposit would result in the dismissal of both appeals without further notice. The appeals were disposed of accordingly.

This judgment highlights the Tribunal's approach to pre-deposit of Cenvat Credit and penalties under the Cenvat Credit Rules, 2004, emphasizing the importance of compliance with directives within specified timelines to avoid dismissal of appeals.