2013 (12) TMI 1234 - AT - Central Excise

Process manufacture or not Waiver of Pre-deposit Held that - The applicant had availed credit and paid the duty which is more than the credit now denied in Commissioner of Central Excise, Pune Versus Ajinkya Enterprises 2012 (7) TMI 141 - BOMBAY HIGH COURT - once the duty on final products has been accepted by the department, Cenvat credit availed need not be reversed even if the activity does not amount to manufacture - Prima facie the applicant has made out a strong case in their favour - The pre-deposit of dues waived till the disposal stay granted.

Summary

Issues:
1. Condonation of delay in filing supplementary appeal.
2. Waiver of pre-deposit of duty, interest, and penalty.

Condonation of Delay:
The applicant sought condonation of delay in filing a supplementary appeal in Appeal No. E/85634/2013, as the main appeal was filed within the normal limitation period, but the registry raised an objection. The Tribunal considered the circumstances and condoned the delay in filing the supplementary appeal, allowing the applicant's request.

Waiver of Pre-deposit of Duty:
The applicant filed an application for waiver of pre-deposit of duty amounting to Rs.3,34,33,367/-, interest, and penalty. The demand was confirmed after denying credit to the applicant on the basis that the process undertaken did not amount to manufacture. The applicant argued that they had paid duty during the disputed period, exceeding the credit now being denied, and also took credit through PLA. They cited a decision of the Hon'ble Bombay High Court in a related case. The Revenue, however, relied on the findings of the lower authority and a Board Circular, asserting that the activity did not amount to manufacture. The Tribunal noted that the applicant had availed credit and paid duty exceeding the denied credit. Referring to the High Court decision cited by the applicant, the Tribunal held that once duty on final products is accepted, Cenvat credit need not be reversed even if the activity does not amount to manufacture. Consequently, the Tribunal found a strong case in favor of the applicant, waiving the pre-deposit of dues and staying the recovery during the appeal's pendency.

Conclusion:
The Tribunal allowed the stay petition, granting the applicant's request for waiver of pre-deposit of duty, interest, and penalty, and stayed the recovery of the same during the appeal process.