2014 (4) TMI 599 - AT - Central Excise

Waiver of pre deposit - extended period of limitation - Denial of benefit of Cenvat credit - Held that - demand stands raised by invoking the longer period of limitation. We note that during the relevant period, earlier decisions of the Tribunal were in favour of the assessee and the law came against them only by the subsequent decision of the Larger Bench in the case of Vandana Global. In as much as during the relevant period, even the Tribunal s decisions were in favour of the assessee, the appellant cannot be attributed with any malafide intent or any suppression or misstatement with intent to evade payment of duty. Ld. advocate relies on the Tribunal s decision in the case of Diamond Cement Ltd. reported as 2012 (6) TMI 73 - CESTAT, NEW DELHI laying down that no suppression can be alleged when during the relevant period decisions of higher appellate forum were in favour of assessee or there were conflicting decisions. As such without going into the merits of the case, as disputed facts are involved, we find that the appellant has a good prima-facie case on merits - Stay granted.

Issues:
1. Dispensing with the condition of pre-deposit of duty and penalty.
2. Denial of Cenvat credit for iron and steel items used in the factory.
3. Invocation of longer period of limitation for confirming the demand.
4. Allegations of malafide intent or suppression by the appellant.
5. Prima facie case on merits for dispensing with pre-deposit condition.

Analysis:
1. The judgment addresses the application seeking dispensation of the pre-deposit condition of duty and penalty amounting to Rs.2,49,21,545. The appellant contended that the denial of Cenvat credit for various iron and steel items used in the factory was incorrect. The appellant argued that the items were used in the fabrication of capital goods, making them eligible for credit. The Tribunal noted conflicting decisions, including the Vandana Global case, and decided to dispense with the pre-deposit condition based on the appellant's prima facie case on merits.

2. The issue of denying Cenvat credit for iron and steel items used in the factory was a key point of contention. The Revenue argued that the items were used as structurals, making them ineligible for credit. However, the appellant asserted that the items were used in the fabrication of capital goods, aligning with the Tribunal's decision in the Vandana Global case. The Tribunal acknowledged the conflicting interpretations and decided in favor of the appellant due to the absence of malafide intent or suppression to evade duty payment during the relevant period.

3. The demand for duty was confirmed for the period from 15.05.06 to 31.03.10 by invoking the longer period of limitation. The Tribunal considered the appellant's argument that the demand was raised based on subsequent decisions like the Vandana Global case, while earlier Tribunal decisions favored the assessee. Citing the Diamond Cement Ltd. case, the Tribunal emphasized that no suppression could be alleged when higher appellate forum decisions were in favor of the assessee. Consequently, the Tribunal dispensed with the pre-deposit condition, highlighting the absence of malafide intent and the appellant's prima facie case on merits.

4. The judgment focused on the absence of malafide intent or suppression by the appellant in evading duty payment. Despite the demand being raised for a longer period by invoking subsequent decisions, the Tribunal found no evidence of intentional wrongdoing by the appellant. Relying on precedents like the Diamond Cement Ltd. case, the Tribunal emphasized the importance of considering the prevailing legal interpretations during the relevant period before attributing any malafide intent to the appellant.

5. In conclusion, the Tribunal, comprising Smt. Archana Wadhwa and Shri Sahab Singh, decided to dispense with the pre-deposit condition of duty and penalty amount based on the appellant's prima facie case on merits. The judgment highlighted the conflicting interpretations regarding Cenvat credit for iron and steel items, the absence of malafide intent by the appellant, and the relevance of prevailing legal decisions during the relevant period in reaching this decision.

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