2011 (11) TMI 557 - AT - Central Excise

Waiver of pre-deposit - Wrong availment of the benefit of concessional rate of duty of exemption Notification No. 59/2008-C.E., dated 7-12-2008 - Held that - Appellant s final products were exempted from payment of duty by Notification No. 29/2004-C.E., dated 9-7-2004, and further amended by Notification No. 59/2008-C.E., dated 7-12-2008 and another notification was also issued granting concessional rate of duty for the period from same product. Appellants availed Notification No. 59/2008-C.E. for clearances made to export, and discharged concessional rate of duty under Notification No. 59/2008-C.E., for which they filed various rebate claims. In our considered view, the entire case of the Revenue is for reversal of the Cenvat credit taken by the appellant on the inputs used by them for manufacturing and clearing such final products at the concessional rate of duty by not availing the benefit of exemption granted by Notification No. 29/2004. If it is undisputed that the appellant had discharged the duty liability on the final products by availing the benefit of Notification No. 59/2008-C.E., he has anyway already reversed the amount of Cenvat credit taken by him on the inputs used for manufacturing of such products. - Following decision of the case of Mahindra & Mahindra Ltd. 2010 (12) TMI 403 - BOMBAY HIGH COURT - Stay granted.

Summary

Issues Involved:
Improper availment of Cenvat credit, waiver of pre-deposit, benefit of concessional rate of duty under Notification No. 59/2008-C.E., reversal of Cenvat credit, applicability of exemption Notification No. 29/2004-C.E., stay of recovery till disposal of appeals.

Improper Availment of Cenvat Credit:
The case involved the improper availment of Cenvat credit and penalties confirmed by the adjudicating authority. The appellant had availed Notification No. 59/2008-C.E. for clearances made to export, discharging concessional duty under the same notification. The Revenue sought reversal of the Cenvat credit taken by the appellant on inputs used for manufacturing and clearing final products at a concessional rate of duty without availing the exemption under Notification No. 29/2004. The Tribunal noted that the appellant had already reversed the Cenvat credit on inputs by discharging duty liability on final products under Notification No. 59/2008-C.E. Citing the case of Mahindra & Mahindra Ltd., the Tribunal found that the appellant had made out a prima facie case for waiver of the pre-deposit of amounts involved.

Waiver of Pre-Deposit:
The appellant filed stay petitions seeking the waiver of pre-deposit amounts confirmed by the adjudicating authority. The first appellate authority upheld the order, leading to the filing of stay petitions. After hearing both sides and perusing the records, the Tribunal considered the issue of wrong availment of the concessional rate of duty under Notification No. 59/2008-C.E. The Tribunal found that the appellant had discharged duty liability on final products by availing the benefit of the said notification, thereby justifying the waiver of pre-deposit. Consequently, the Tribunal allowed the applications for the waiver of pre-deposit amounts and stayed the recovery until the disposal of appeals.

Benefit of Concessional Rate of Duty and Reversal of Cenvat Credit:
The central issue revolved around the appellant's availing of the benefit of the concessional rate of duty under Notification No. 59/2008-C.E. for export clearances and the subsequent reversal of Cenvat credit. The appellant had utilized Notification No. 59/2008-C.E. for products exempted from duty under Notification No. 29/2004-C.E. The Tribunal observed that the appellant had already reversed the Cenvat credit on inputs used for manufacturing final products under the concessional rate of duty. Citing the decision of the Hon'ble High Court of Bombay in a similar case, the Tribunal concluded that the appellant had established a prima facie case for the waiver of pre-deposit amounts involved. As a result, the Tribunal allowed the applications for waiver and stayed the recovery pending appeal disposal.

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