2014 (4) TMI 45 - AT - Central Excise

Waiver of predeposit and stay of recovery in respect of duty - Availment of CENVAT Credit - Held that - No prima facie case for the appellant against the said demand of duty. It is not in dispute that CENVAT credit should not have been utilized during the said period. The aforesaid amount of Rs. 2, 16, 472/- should have been paid towards duty by debit in PLA. The appellant has not debited equivalent amount or any part thereof in PLA at any later stage. The learned counsel for the appellant submits that they have since wound up their business and surrendered registration certificate to the department. These facts however have not been stated in the memo of appeal or the stay application despite the fact that the surrender of registration certificate occurred prior to filing of the appeal. Even in the context of pleading financial hardships in the stay application the appellant chose not to mention the above facts. Be that as it may the fervent plea of financial hardships raised by the learned counsel will be considered to a reasonable extent - Conditional stay granted.

Summary

Issues:
Waiver of predeposit and stay of recovery in respect of duty demanded for a specific period.

Analysis:
The appellant filed an application seeking waiver of predeposit and stay of recovery regarding a duty amount demanded for a particular period. The duty in question was payable for the month of December 2009 without interest by 5/1/2010 or with interest by 5/2/2010, but it was paid with interest on 7/5/2010. The appellant used CENVAT credit for payment of duty on clearances between 5/1/2010 and 7/5/2010, which was not in compliance with Rule 8(3A) of the Central Excise Rules 2002. The impugned demand of duty was based on this non-compliance.

Upon hearing both parties and considering their submissions, the judge found no prima facie case for the appellant against the demand of duty. It was acknowledged that CENVAT credit should not have been utilized during the specified period, and the amount in question should have been paid from PLA. The appellant did not debit the equivalent amount in PLA at any later stage, and despite claiming financial hardships, did not mention important facts like winding up their business and surrendering the registration certificate. However, the plea of financial hardships was taken into consideration to a reasonable extent.

Considering the facts and circumstances of the case, the judge directed the appellant to predeposit a specific amount within a set timeframe and report compliance accordingly. Subject to this compliance, there would be a waiver and stay in respect of the balance amount of duty until the final disposal of the appeal.