2013 (11) TMI 1180 - AT - Central Excise

Cenvat credit under Rule 16 of CE Rules on Returned Goods Waiver of Pre-deposit Held that - The amount deposited is not sufficient to safeguard the interests of the Revenue as there appears to be evidence indicating that some of the returned consignments in respect of which credit has been taken had not been received back - the appellant are directed to deposit an amount of Rupees Two Lacs as pre-deposit upon such submission rest of the duty to be waived till the disposal Partial stay granted.

Summary

Issues: Disputed Cenvat credit on tools returned by customers, confirmation of Cenvat credit demand, appeal against orders, stay application for deposit amount.

Disputed Cenvat Credit on Tools Returned by Customers:
The appellant, a manufacturer of Diamond Impregnated Segments, claimed Cenvat credit of Rs. 8,94,691 for tools returned by customers after clearance from the factory. The department alleged that the goods were not returned based on inquiries at the customers' end. Consequently, a Cenvat credit demand of Rs. 8,94,691 was confirmed against the appellant, along with interest and penalty, by the Additional Commissioner's order-in-original. The Commissioner (Appeals) upheld this decision in an order-in-appeal. The appellant filed an appeal against this order, stating that the tools were returned for repairs, justifying the Cenvat credit under Rule 16 of the Central Excise Rules.

Confirmation of Cenvat Credit Demand:
The CESTAT New Delhi heard both sides regarding the stay application related to the disputed amount. It was noted that the appellant had already deposited Rs. 2,25,000 out of the disputed amount of Rs. 8,94,691. However, the tribunal found this amount insufficient to protect the Revenue's interests, as evidence suggested that some returned consignments for which credit was claimed were not received back. Consequently, the appellant was directed to deposit an additional Rs. 2,00,000 within four weeks. Upon compliance, the pre-deposit requirement for the remaining Cenvat credit demand, interest, and penalty would be waived, and recovery stayed pending appeal disposal.

Appeal Against Orders and Stay Application:
The appellant's appeal against the Commissioner (Appeals) order-in-appeal involved challenging the confirmation of Cenvat credit demand and imposition of interest and penalty. The tribunal dismissed the miscellaneous application for early hearing as the stay application was disposed of. The appellant's compliance with the directed deposit would result in the waiver of the remaining pre-deposit amount and a stay on recovery until the appeal's final resolution.

This detailed analysis of the judgment addresses the disputed Cenvat credit issue, confirmation of demand, the appeal process, and the stay application's outcome, providing a comprehensive overview of the legal proceedings and decisions made by the CESTAT New Delhi.