2014 (1) TMI 787 - AT - Central Excise

Cenvat credit availed on sale of used capital goods Waiver of Pre-deposit Held that -Following Harsh International (Khaini) Pvt. Ltd. 2012 (6) TMI 340 - DELHI HIGH COURT - the goods purchased prior to 13.11.2007, the amended provision of CENVAT Credit Rules will not apply and the transaction of such capital goods needs to be considered for discharge of duty liability - the appellant has made out a case for waiver of amount - Pre-deposit waived till the disposal Stay granted.

Summary

Issues:
1. Waiver of duty, interest, and penalty on the sale of used capital goods with availed CENVAT Credit.
2. Interpretation of CENVAT Credit Rules post-amendment in November 2007.
3. Applicability of High Court judgments in similar cases.

Analysis:
The judgment by the Appellate Tribunal CESTAT AHMEDABAD addressed a Stay Petition seeking the waiver of duty, interest, and penalty amounting to Rs.1,83,665/- in connection with the sale of used capital goods with availed CENVAT Credit. The lower authorities had confirmed the demand, interest, and imposed an equivalent penalty, citing the need for re-valuation of capital goods post the November 2007 amendment to CENVAT Credit Rules. The appellant argued that the issue was settled by the Hon'ble High Court of Delhi in the case of Harsh International (Khaini) Pvt. Ltd. 2012 (281) ELT 714 (Del.), which was supported by the appellant's counsel.

The respondent, however, pointed to the judgment of the Hon'ble High Court of Madras in the case of Rogini Mills Ltd 2011 (264) ELT 367 (Mad.) as relevant to the issue at hand. Upon reviewing both judgments, the Tribunal found that the matter in question aligned with the decision of the Hon'ble High Court of Delhi in the case of Harsh International (Khaini) Pvt. Ltd. The Tribunal concurred with the interpretation that for goods purchased before 13.11.2007, the amended provisions of CENVAT Credit Rules would not apply, and the duty liability for such capital goods should be determined accordingly.

In light of the above analysis, the Tribunal concluded that the appellant had substantiated a case for the waiver of pre-deposit of the amounts in question. Consequently, the application for the waiver of pre-deposit was granted, and the recovery of the said amounts was stayed pending the disposal of the appeal. The judgment, delivered by Mr. M.V. Ravindran, emphasized the applicability of relevant precedents and legal interpretations to determine the duty liability concerning the sale of used capital goods with availed CENVAT Credit.