2014 (3) TMI 634 - AT - Central Excise

Denial of benefit of cenvat credit of duty paid on Iron and Steel items used as support structural - Held that - demand of around Rs.6 lakhs would be within limitation period. No financial hardship is pleaded. As such, we direct the applicant to deposit Rs. 10 Lakhs (Rupees Ten Lakhs) within a period of 8 weeks from today, as a condition of hearing of the appeal. Subject to deposit of the above amount, pre-deposit of the balance amount of duty and entire amount of penalty shall stand waived and its recovery is stayed during the pendency of the appeal - Conditional Stay granted.

Summary

Issues:
1. Denial of cenvat credit on Iron and Steel items used as support structural.
2. Confirmation of demand of duty.
3. Invocation of longer period of limitation.
4. Grant of stay on the issue of limitation.
5. Direction for deposit of a specified amount as a condition of hearing the appeal.
6. Waiver of pre-deposit of balance duty amount and penalty.
7. Stay on recovery during the pendency of the appeal.

Analysis:
1. The Tribunal found that the demand of duty amounting to Rs.5,52,27,559 against the applicant was confirmed due to the denial of cenvat credit on Iron and Steel items used as support structural. This decision was based on the precedent set by the Larger Bench in the case of Vandana Global Ltd. Vs. CCE 2010 (253) ELT 440 (Tribunal-LB). However, it was noted that prior to this decision, all rulings were in favor of the assessee, indicating no suppression on the part of the appellant.

2. The Tribunal invoked a longer period of limitation for confirming the demand. Despite this, in similar cases where no suppression was found, stays were granted on the issue of limitation. The Tribunal referred to multiple decisions such as M/s. Salasar Steel And Power Ltd. Vs.CCE, Raipur, Balkrishna Industries Ltd.Vs. CCE, Jaipur-I, M/s. C.G. Ispat Pvt. Ltd. Vs. CCE, Raipur, M/s. Sourabh rolling Mills (P) Ltd. Vs. CCE, Raipur, and M/s.G.R. Sponge & Power Ltd. Vs. CCE, Raipur where stays were granted.

3. The appellant's advocate acknowledged that a demand of approximately Rs.6 lakhs fell within the limitation period. No financial hardship was pleaded, leading to a directive from the Tribunal for the applicant to deposit Rs. 10 Lakhs within 8 weeks as a condition for hearing the appeal. Upon this deposit, the pre-deposit of the remaining duty amount and penalty was waived, and the recovery was stayed during the appeal's pendency. The compliance was scheduled to be reviewed on 25.4.2013.