2014 (1) TMI 520 - AT - Central Excise

Eligibility to avail canvat credit - Scrap transported from factory - Waiver of Pre-deposit of Penalty under Rule 26 of Central Excise Rules, 2002 Held that - The invoice clearly indicates that the appellant has discharged the excise duty on the waste and scrap of iron, steel which arises due to the ship breaking - they are not arranging for the transport but is arranged by the dealers to transport scrap from appellant s factory - prima facie, the appellant cannot be visited with penalty under Rule 26 of the Central Excise Rules, 2002 - the appellant has made out a strong prima facie for the waiver of the pre-deposit of the amount Pre-deposits waived till the disposal Stay granted.

Summary

Issues: Stay petition for waiver of pre-deposit of penalty under Rule 26 of Central Excise Rules, 2002.

The judgment pertains to a stay petition filed for the waiver of pre-deposit of penalty imposed under Rule 26 of the Central Excise Rules, 2002. The appellant had issued invoices in the name of another entity, enabling them to avail ineligible cenvat credit. The tribunal, after hearing both sides and examining the records, noted that the appellant, a registered manufacturer, had discharged excise duty on waste and scrap of iron and steel resulting from ship breaking. The appellant clarified that they did not arrange transportation, which was done by dealers. The invoices, weigh bridge slips, and payment receipts indicated proper documentation by the appellant. Consequently, the tribunal found that the appellant could not be penalized under Rule 26. The tribunal observed a strong prima facie case for the waiver of pre-deposit, allowing the application and staying the recovery until the appeal's disposal. The appeal was to be connected with another appeal involving the entity named in the invoices for joint disposal.

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