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2014 (2) TMI 915 - AT - Central ExciseWaiver of pre-deposit - Denial of benefit of CENVAT credit of additional customs duty - Disallowance of on the ground of violation of condition of Notification No. 32/2005-Cus., dated 8-4-2005 regarding installation of capital goods - The lower authorities have denied the CENVAT credit on the ground that there was no extension of periods granted by the appropriate officer for installation of the capital goods - Held that - violation, if at all, is of Notification issued under the Customs Act, relatable to the import of the capital goods. As such, denial of CENVAT credit by the Excise authorities on the said ground is not appropriate. We are informed by the ld. Advocate that no action stands taken by the Commissioner alleging any violation and the consequent denial of the benefit of the Customs notification. Certificate showing installation of the capital goods in the appellant factory stands given by the Central Excise authority on 28-9-2008. Even if there is no express extension of the period of 6 months, grant of such certificate within the extended period reflects upon the deemed extension - drawback also stands availed by the importer. It is only a doubt expressed by them and we are of the view that such doubt so expressed was a verifiable fact and the authorities were within their rights to verify the same - stay granted.
Issues:
1. Denial of CENVAT credit under the Target Plus Scheme. 2. Violation of conditions of Notification No. 32/2005-Cus. 3. Installation of imported capital goods within the specified period. 4. Allegation of non-availment of drawback by the importer. Analysis: 1. The appellant sought to dispense with the pre-deposit of duty and penalty amounting to Rs. 33,76,043/-, which were confirmed against them due to the denial of CENVAT credit on additional customs duty paid on imported capital goods under the Target Plus Scheme. The denial was based on the alleged violation of conditions of Notification No. 32/2005-Cus., dated 8-4-2005. 2. The Tribunal observed that one of the conditions of the notification required the importer to install the imported capital goods within six months from the date of import or within an extended period granted by the customs authorities. The appellant imported the goods between June 2006 to April 2007, and certificates of installation were provided on 28-9-2008. The lower authorities disallowed the credit citing lack of extension for installation period by the appropriate officer. 3. After considering arguments from both sides, the Tribunal agreed that any violation was related to the Customs Act and not grounds for denying CENVAT credit under the Excise authorities. The absence of any action by the Commissioner alleging violation further supported the view that denial of credit was not appropriate. The issuance of installation certificates within the extended period implied deemed extension, even without explicit approval. 4. The Tribunal addressed the allegation of non-availment of drawback by the importer, which was not part of the Show Cause Notice. Despite doubts expressed by authorities, no categorical finding was made regarding drawback availing. The Tribunal emphasized that such doubts should be verified as factual evidence, and in the absence of clear allegations or findings, the ground was not valid for the Revenue. 5. Considering the merits of the case and the arguments presented, the Tribunal ruled in favor of the appellant. They dispensed with the pre-deposit condition of duty and penalty, allowing the Stay Petition unconditionally. The decision was made based on the lack of explicit violations and the prima facie view supporting the appellant's position on the matter.
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