2014 (1) TMI 625 - AT - Central Excise

Denial of cenvat credit - Calculation of the use of input Naptha - Waiver of Pre-deposit Held that - The appellant had periodically submitted the data relating to consumption of input Naptha in their factory as well as sent to M/s HPL Cogeneration Ltd to be used in the generation of electricity and steam - The relevant data relating use of electricity in their factory and at other utilities were submitted and proportionate CENVAT Credit availed on the Naptha had been reversed depending on its use - Prima facie, the data submitted by the applicant were not disputed by the department, but on its interpretation, the department arrived at a conclusion that the amount of CENVAT Credit debited by the Applicant, were not correct - There was no merit that incorrect interpretation of data by the assesse, would result in suppression of fact or mis-statement of fact - the assessee made an offer to deposit Fifteen Lakhs within the normal period is accepted upon such submission rest of the duty to be stayed till the disposal Partial stay granted.

Issues: Waiver of pre-deposit of Cenvat Credit and penalty imposed under Rule 15 of Cenvat Credit Rules, 2004.

Waiver of Pre-deposit of Cenvat Credit:
The applicant sought waiver of pre-deposit of Cenvat Credit amounting to Rs.3,76,54,534.38 and an equal penalty imposed under Rule 15 of Cenvat Credit Rules, 2004 read with Section 11AC of the Central Excise Act, 1944. The applicant had availed CENVAT credit on input Naptha, part of which was sent to another company for conversion into steam and electricity. The Ld. Advocate argued that the electricity generated was not entirely used in their plant for manufacturing finished goods, and a portion was sent to subsidiaries. The applicant reversed the CENVAT Credit proportionately for the part of Naptha used in generating electricity not related to manufacturing. The Ld. Commissioner acknowledged the correctness of the data submitted but disagreed on interpretation, leading to a demand notice for recovery of inadmissible CENVAT Credit. The Tribunal found no merit in the incorrect interpretation claim, accepted the applicant's offer to deposit Rs.15.00 Lakhs for the normal period, and directed the deposit within four weeks, waiving the balance amount of dues and staying recovery during the appeal's pendency.

Penalty Imposed under Rule 15 of Cenvat Credit Rules, 2004:
The Revenue argued that the burden of availing the admissible amount of CENVAT Credit solely lies on the assessee, as prescribed under the CENVAT Credit Rules, 2004. The Revenue contended that the extended period of limitation is applicable in this case as the applicant failed to meet the burden of availing the correct CENVAT Credit amount. However, the Tribunal observed that the applicant had regularly submitted data on Naptha consumption and usage for electricity and steam generation. The Tribunal noted that while the department did not dispute the correctness of the data, they disagreed on the interpretation, leading to the demand notice. The Tribunal found no suppression of facts or misstatement by the applicant and accepted the offer to deposit Rs.15.00 Lakhs for the normal period, waiving the remaining dues and staying recovery during the appeal's pendency.

In conclusion, the Tribunal granted the waiver of pre-deposit of Cenvat Credit and penalty imposed under Rule 15 of Cenvat Credit Rules, 2004, based on the applicant's offer to deposit a specified amount, finding no merit in the Revenue's claim of incorrect interpretation and acknowledging the regular submission of data by the applicant.

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