2012 (4) TMI 519 - AT - Central Excise

Modification of stay order - Waiver of pre deposit - Non-payment of NCCD arising out of utilization of Cenvat credit - Held that - legal position that machinery provisions do not exist for collection of NCCD short levied was not brought to the notice of the Bench when the stay petition was argued on 12-12-2011. Since this is a legal position which was not considered while passing the order and on consideration of the legal position, we are of the view that there is a prima facie case for waiver of pre-deposit of interest arising from the impugned order since the cenvat availed has resulted in short levy of NCCD - Stay order modified.

Summary

Issues: Modification of stay order to waive pre-deposit of interest on short levy of NCCD.

Analysis:
1. Issue of Modification of Stay Order: The appellants sought modification of the stay order to waive pre-deposit of interest on the short levy of NCCD. The appellants had initially been directed to deposit the entire duty and interest payable for admission of the appeal. The modification application argued that the legal position regarding the absence of machinery provisions for the collection of NCCD short levied was not considered during the initial hearing. The appellant relied on a previous Tribunal decision to support their claim that interest should not be demanded in such cases. The Revenue opposed the modification, arguing that the interest demanded was related to credit taken under the Cenvat Credit Rules, not the short levy of NCCD.

2. Legal Position Consideration: The Tribunal, comprising Ms. Archana Wadhwa and Shri Mathew John, analyzed the legal position presented by both sides. They acknowledged that the machinery provisions for the collection of NCCD short levied were not discussed during the initial hearing. Upon considering this legal position and the arguments presented, the Tribunal found a prima facie case for waiving the pre-deposit of interest arising from the impugned order. The Tribunal noted that the cenvat availed had led to the short levy of NCCD, which was a crucial factor in their decision to modify the stay order.

3. Decision and Modification: Ultimately, the Tribunal decided to modify the stay order dated 12-12-2011 to waive the pre-deposit of interest arising from the impugned order. They granted a stay on the collection of such dues, taking into account the legal position and the specific circumstances of the case. The decision was pronounced in open court, emphasizing the Tribunal's careful consideration of the legal arguments and the necessity to ensure fairness in the application of tax laws and provisions.