2014 (3) TMI 786 - AT - Central Excise

Waiver of pre-deposit - Cenvat Credit on inputs supplied free of cost - MRP Based valuation u/s 4A - whether the assessee is eligible to avail Cenvat credit of the duty paid on the film roll which are cleared by the assessee along with the camera pack of the camera on which duty liability discharged based on Section 4A - Held that - accessories of the final product cleared with the final product are considered as input. There is no dispute that the films which are cleared along with final product by the appellant in the combination pack are duty paid. It is also seen from the order-in-original that the ld. Commissioner has recorded in his findings that the films are accessories to the camera. We find that, prima-facie, appellant has made out a case for waiver of pre-deposit of amounts involved. Applications for waiver of pre-deposit of the amounts involved are allowed and recovery thereof stayed till the disposal of the appeals - Stay granted.

Summary

Issues:
1. Eligibility of the appellant to avail Cenvat credit on duty paid film rolls.

Analysis:
The issue in this case revolves around the eligibility of the appellant to avail Cenvat credit on the duty paid film rolls. The lower authorities contended that the appellant could not claim Cenvat credit on films provided free of cost. The appellant's counsel argued that the film rolls are integral accessories to the camera, and cited a precedent where film rolls were considered accessories. The Commissioner's findings also supported the view that film rolls are accessories to the camera.

The appellant's counsel highlighted that the film rolls are packed with the camera and duty liability is discharged under Section 4A. On the other hand, the SDR argued that the value of films was not included in the camera's value as they were provided free of cost under an agreement. However, the definition of "input" in the Cenvat Credit Rules includes accessories of the final product cleared with the product. Since the film rolls are cleared along with the camera and are considered accessories to the camera, the appellant has a prima facie case for waiver of pre-deposit of the amounts involved.

In conclusion, after considering the submissions from both sides and examining the definition of "input" in the Cenvat Credit Rules, the Tribunal found that the appellant has made a case for waiver of pre-deposit of the amounts involved. Therefore, the applications for waiver of pre-deposit were allowed, and the recovery of the amounts stayed pending the disposal of the appeals.