2014 (5) TMI 495 - AT - Central Excise

Waiver of pre deposit - CENVAT Credit for furnace procured from sister unit - Held that - Revenues case is only and only based upon the physical condition of the furnace noticed by the Audit party at the time of their visit to the appellants factory which was after a period of 2 years from the date of receipt of furnace. There is virtually no evidence on record to indicate that the furnace was not used by the appellant during intervening period. No statement of any person stand recorded by the Revenue. If the Revenues pleads allegations, minimum required from them was to complete investigation by recording the statements of the concerned persons who were associated with the use of furnace. - Decided in favour of assessee.

Summary

Issues: Request to dispense with pre-deposit of duty and penalty due to reversal of Cenvat credit for furnace procured from sister unit.

Analysis:
The judgment addresses the application seeking exemption from the pre-deposit of duty and penalty amounting to Rs. 96,978/-, confirmed against the appellant for reversing Cenvat credit related to a furnace procured from their sister unit. The sister unit initially purchased the furnace, availed credit, and later transferred it to the appellant in May 2007 by reversing the credit. Subsequently, an audit in February 2009 revealed the furnace lying in the appellant's factory as scrap, leading to proceedings against the appellant for demand confirmation. The appellant argued that the furnace was used for some time before becoming scrap and contested the absence of an installation certificate requirement for the furnace. The judgment notes the lack of evidence supporting the Revenue's claim solely based on the physical condition of the furnace observed during the audit visit after two years from receipt. It highlights the absence of recorded statements or thorough investigation by the Revenue, emphasizing the insufficiency of evidence to prove non-usage of the furnace by the appellant. Consequently, the impugned orders are set aside, and the appeal is allowed, disposing of the stay petition and appeal accordingly.