2013 (12) TMI 341 - AT - Central Excise

Quantity- based exemption - Cenvat credit taken on input services lapsed on 1.4.2008 - Recoverable under Rule 14 of the CENVAT Credit Rules, 2004 Waiver of Pre-deposit held that - The appellant opted out of the CENVAT credit scheme on 1.4.2008, with effect from which date they were availing quantity- based exemption from payment of duty on their final product - The demand is in terms of sub-rule (2) of Rule 11 of the CCR, 2004 - the appellant should pre-deposit the amount of CENVAT credit, in case they have already utilized and, if the credit has not been utilized, they shall not utilize it till the final disposal of the appeal - the CENVAT credit have already been utilized, the appellant shall pre-deposit the amount stay not granted.

Summary

Issues:
1. Applicability of Rule 14 of the CENVAT Credit Rules, 2004 for recovery of lapsed credit on input services.
2. Recoverability of interest on lapsed CENVAT credit.
3. Requirement for pre-deposit of the lapsed CENVAT credit amount.
4. Conditions for waiver and stay on interest on duty and penalties.

Analysis:
1. The appellant sought waiver and stay regarding the recovery of lapsed CENVAT credit of Rs.9,14,248/- on input services as per Rule 14 of the CENVAT Credit Rules, 2004. The appellant opted out of the CENVAT credit scheme on 1.4.2008, leading to the lapse of the credit. The Tribunal noted that the impugned demand was in accordance with sub-rule (2) of Rule 11 of the CCR, 2004. The Tribunal, after considering the facts and law provisions, directed the appellant to pre-deposit the lapsed CENVAT credit amount if already utilized, and refrain from using it until the appeal's final disposal.

2. The lower authorities contended that interest on the lapsed CENVAT credit was also recoverable from the appellant from 1.4.2008 until the payment of the amount. The Tribunal, subject to due compliance with the pre-deposit requirement, granted waiver and stay on interest on duty and penalties. The burden was placed on the appellant to demonstrate that the credit in question had not been utilized by the specified date for compliance.

3. The Tribunal ordered the appellant to pre-deposit the lapsed CENVAT credit amount within 6 weeks from the receipt of the order's certified copy and report compliance to the Deputy Registrar by a specified date. The Deputy Registrar was tasked with reporting on the compliance status subsequently. The waiver and stay on interest on duty and penalties were contingent upon the appellant's compliance with the pre-deposit directive.

4. The Tribunal emphasized the importance of compliance with the pre-deposit requirement and the burden of proof on the appellant regarding the utilization of the lapsed CENVAT credit. The decision aimed to ensure adherence to the legal provisions while providing an opportunity for the appellant to present evidence of non-utilization of the credit.