2014 (1) TMI 1059 - AT - Central Excise

Reversal of CENVAT Credit Credit availed on common inputs Waiver of Pre-deposit Held that - Bagasse an intermediate by-product arises during the manufacturing of sugar, there is no need to reverse 5% of the value of Bagasse Following Manakpur Chini Mills Versus CCE., Allahabad 2012 (7) TMI 474 - CESTAT, NEW DELHI - the appellant has made out a case for waiver of pre-deposit of the amounts involved Pre-deposits waived till the disposal Stay granted.

Summary

Issues involved:
1. Waiver of pre-deposit of duty, interest, and penalty
2. Reversal of CENVAT Credit on common inputs used for manufacturing sugar

Analysis:
The judgment by the Appellate Tribunal CESTAT Ahmedabad involved two Stay Petitions seeking waiver of pre-deposit of duty, interest, and penalty amounting to Rs.4,32,239. The core issue revolved around the reversal of CENVAT Credit availed on common inputs used for manufacturing sugar. The Revenue contended that the appellant should reverse 5% of the value of Press Mud, an exempted by-product arising during sugar production, as it was considered a final product consuming common inputs on which CENVAT Credit was claimed. However, the Tribunal noted a precedent set in a similar case concerning Bagasse, another by-product, where it was held that there was no requirement to reverse 5% of its value. The Tribunal found merit in the appellant's argument, citing the judgment in the case of Manakpur Chini Mills, which supported the appellant's position. Additionally, it was highlighted that the Revenue had appealed the Manakpur Chini Mills case before the High Court, but the status of the appeal was uncertain. Despite this, the Tribunal concluded that the issue was covered by the previous judgment, thus granting the appellant's request for waiver of pre-deposit. Consequently, the applications for waiver were allowed, and recovery was stayed pending the appeal's disposal.