2014 (3) TMI 236 - AT - Central Excise

Modification of stay order - Violation of principle of natural justice - reversal of cenvat credit on used capital goods sold as scrap - Held that - Tribunal on this issue granted unconditional stay in appellant s own case. - appellant filed modification of stay order passed by the Commissioner (Appeals) which was not considered by him and the appeal was dismissed automatically. In view of that, it is appropriate to set aside the impugned order and remand the matter back to the Commissioner (Appeals) to decide the stay application after considering the case law submitted by the appellant - Decided in favour of assessee.

Summary

Issues:
1. Availment of cenvat credit on capital goods
2. Demand of duty and penalty
3. Dismissal of appeal for non-compliance
4. Consideration of stay application

Analysis:
1. The appellant, engaged in manufacturing plastic articles, availed cenvat credit on capital goods, specifically MS copper coated rollers, which were later cleared as scrap. The demand of duty, interest, and penalty was imposed for the period December 2008 to September 2009, requiring the appellant to reverse the cenvat credit on the capital goods. The Commissioner (Appeals) directed a predeposit under section 35F of the Central Excise Act, 1944, with non-compliance leading to automatic dismissal of the appeal.

2. The appellant argued that the capital goods were sent to another unit for further use and that the Tribunal had previously granted unconditional stay in a similar case. The appellant highlighted decisions by various High Courts and Tribunals supporting the position that reversal of credit is not required when capital goods are removed as old or damaged. On the contrary, the Revenue contended that precedents favored their stance.

3. The Tribunal acknowledged the previous grant of unconditional stay in the appellant's case but noted that the modification of the stay order was not considered by the Commissioner (Appeals), resulting in the automatic dismissal of the appeal. Consequently, the Tribunal set aside the impugned order and remanded the matter to the Commissioner (Appeals) to reevaluate the stay application in light of the case law presented by the appellant.

4. Ultimately, the Tribunal allowed the appeal by remanding the case back to the Commissioner (Appeals) for a reconsideration of the stay application, emphasizing the need for a proper hearing and consideration of the appellant's submissions. The decision highlighted the importance of due process and fair consideration in such matters, ensuring a just outcome.