2014 (1) TMI 327 - AT - Central Excise

Admissibility of cenvat credit availed against the invoices received Waiver of Pre-deposit Held that - Revenue contended that even though they have received the invoices, the goods mentioned in the invoices had never been crossed the border and they had not received the goods in their factory - the inputs must not have been used in or in relation to the manufacture of final product - The determination of the issue rest on the appreciation of evidences collected by the Department and rebutted by the applicant - the applicants have already deposited an amount of Rs.10.00 lakhs assessee has made a fair offer to deposit another Rs.7.00 lakhs the assessee is directed to make pre-deposit of Rupees seven lakhs as pre-deposit upon such submission rest of the duty to be stayed till the disposal Partial stay granted.

Issues involved:
Application for waiver of pre-deposit of cenvat credit, penalty under Rule 15 of Cenvat Credit Rules, 2004, personal penalty under Rule 26 of Central Excise Rules, 2002.

Analysis:
The case involved an application for waiver of pre-deposit of cenvat credit amounting to Rs.71,41,413/- along with penalties imposed under Rule 15 of the Cenvat Credit Rules, 2004 and personal penalty of Rs.25,00,000/- on the Director of the Applicant Company. The Applicant, engaged in manufacturing TMT Bars and Rods, was accused of wrongly availing cenvat credit on invoices without receiving the principal raw material, MS Ingots, during the period from 01.06.2004 to 31.03.2007. The Department alleged that the goods did not cross the Assam Meghalaya Border as per the Check Post Authorities' evidence. The Applicant denied the allegations, stating there was no evidence that the MS Ingots were not used in the manufacturing process and that all payments were made through cheques without any suppression of facts. An amount of Rs.10.00 lakhs was already deposited during the investigation, and the Applicant offered to deposit an additional Rs.7.00 lakhs.

The Revenue argued that there were sufficient evidences against the Applicant, indicating that the inputs mentioned in the invoices were not received in their factory. The suppliers allegedly did not supply the goods, making the credit availed irregular. The Tribunal analyzed the issue of admissibility of cenvat credit against the invoices received by the Applicant. The Department contended that even though invoices were received, the goods did not reach the factory, implying they were not used in the manufacturing process. The decision hinged on the evaluation of evidence collected by the Department and the Applicant's rebuttal. Considering that the Applicant had already deposited Rs.10.00 lakhs and offered to deposit an additional Rs.7.00 lakhs, the Tribunal accepted the offer. The Applicant was directed to make a pre-deposit of Rs.7.00 lakhs within eight weeks, failing which both appeals would be dismissed. Upon deposit, the balance amount of dues would be waived, and recovery stayed during the appeal's pendency.

In conclusion, the Tribunal's decision emphasized the importance of evidence in determining the admissibility of cenvat credit and the need for compliance with pre-deposit requirements to proceed with the appeal process effectively.

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