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2012 (8) TMI 844 - AT - Central ExciseWaiver of deposit of MODVAT Credit - Deemed credit - Discharge of burden of proof - Held that - this is a case of deemed Credit, and the benefit can be denied only under the exceptional categories. Prima facie, we find that the Department could not show that the Applicant s case falls under the exceptional categories. Further, the Department challenged to deny the benefit to the Applicant on the ground that the inputs are exempted vide Notification No. 182/84-C.E., as amended. The aforesaid Notification is conditional Notification and not unconditional, therefore, the onus would continue to lie on the Department to show that the inputs in this case are clearly recognizable as non-duty paid. We find that the Department could not produce any document showing that the goods were charged to nil rate of duty or had been cleared without payment of duty or were exempt. On the other hand, proceedings were initiated against the Applicant on the ground that the Applicant could not produce any tangible evidence in their support, that the goods are clearly non-duty paid. The Department s case rests only on the ground that the Notification No. 182/94, as amended, has not been complied with - Stay granted.
Issues:
Application for waiver of deposit of MODVAT Credit and penalty under Central Excise Rules, 1944 based on deemed Credit availed by the Applicant. Department's contention regarding the availability of deemed Credit, exemption under Notification No. 182/84, and balance of convenience in favor of the Department. Analysis: The Applicant filed an Application for waiver of deposit of MODVAT Credit and penalty under Central Excise Rules, 1944, amounting to Rs. 71,28,091/-, based on the deemed Credit availed on certain inputs. The Department alleged that the Applicant could not provide tangible evidence of the duty paying character of the inputs, specifically Aluminium Shots, Cubes, and Starts, during a specific period. The Applicant argued that the facility of deemed Credit is subject to exceptions, and the burden of proof lies with the Department to establish non-compliance. They cited legal precedents to support their claim, emphasizing the need for the Department to demonstrate that the goods were clearly non-duty paid. The Department contended that even if the Applicant established a prima facie case, the balance of convenience favored the Department, citing a relevant High Court decision. They highlighted financial hardship considerations and referred to another legal precedent to support their stance. However, the Tribunal noted that this case involved deemed Credit, which could only be denied under exceptional circumstances. The Department's argument based on the exemption under Notification No. 182/84 was deemed insufficient as the onus remained on them to prove that the inputs were non-duty paid. The Tribunal found that the Department failed to provide any evidence to support their claim that the goods did not incur Central Excise Duty. In contrast, the proceedings against the Applicant were solely based on non-compliance with a specific notification, without concrete proof of duty exemption. Consequently, the Tribunal concluded that the Applicant had successfully established a prima facie case for total waiver of the pre-deposit. Therefore, the requirement of pre-deposit was waived, and the recovery stayed pending the Appeal, as the Stay Petition was allowed.
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