2014 (7) TMI 105 - AT - Central Excise

Waiver of pre deposit - Debit made in CENVAT Credit - whether the amount of pre-deposit ordered in the stay order for compliance with provisions of Section 35F can be deposited by the debiting the Cenvat Credit Account - Held that - though the Commissioner (Appeals) has relied upon the Tribunal s judgment in the case of Fibre Glass Insulation (2000 (11) TMI 453 - CEGAT, NEW DELHI), the Tribunal in two other cases of Nicco Corporation Ltd. (2012 (8) TMI 815 - CESTAT, KOLKATA) & Minwool Rock Fibres Ltd. (2012 (11) TMI 1002 - CESTAT BANGALORE) has taken contrary view and has clearly held that pre-deposit made by the way of debiting the Cenvat Credit Account is permitted. The decision of the Tribunal in case of Minwool Rock Fibers Ltd. (supra) and Nicco Corporation Ltd. (supra) is in accordance with the decision in case of Birla Yamaha Ltd. reported in 1995 (10) TMI 139 - CEGAT, NEW DELHI which has not been considered in the case of M/s. Fibre Glass Insulation (supra). The judgment in case of Birla Yamaha Ltd. (supra) is of a Bench of Three Members. In view of this I hold that the impugned order is not correct and the appellant would have to be treated as having complied with the direction of pre-deposit in the stay order - Matter remanded back - Decided in favour of assessee.

Summary

Issues Involved:
- Compliance with pre-deposit requirements for stay application
- Validity of debiting Cenvat Credit Account for pre-deposit
- Interpretation of Section 35F regarding pre-deposit

Analysis:

Compliance with Pre-deposit Requirements for Stay Application:
The appellant was alleged to have clandestinely removed 100 MT of sponge iron without paying duty, leading to a duty demand of Rs. 4,95,014. The Assistant Commissioner confirmed the duty demand, along with interest and penalty. The appellant, after filing an appeal with the Commissioner (Appeal) and a stay application, was directed to deposit the entire duty amount. The appellant complied by debiting the directed amount in the Cenvat Credit account. However, the Commissioner (Appeals) dismissed the appeal for non-compliance, stating that the pre-deposit should have been made in cash, not by debiting the Cenvat Credit Account, citing a previous Tribunal judgment. This led to the current appeal.

Validity of Debiting Cenvat Credit Account for Pre-deposit:
The appellant argued that debiting the Cenvat Credit Account for pre-deposit is valid, citing Tribunal judgments in other cases where such practice was recognized. The appellant sought a remand to the Commissioner (Appeals) for a decision on merits based on this argument. The Respondent defended the Commissioner (Appeals)' decision, reiterating their findings.

Interpretation of Section 35F Regarding Pre-deposit:
The Tribunal, after considering submissions from both sides and reviewing the records, focused on whether pre-deposit ordered in a stay order can be made by debiting the Cenvat Credit Account. Despite the Commissioner (Appeals) relying on a previous judgment, the Tribunal found that other Tribunal decisions permitted pre-deposit through debiting the Cenvat Credit Account. The Tribunal highlighted that these decisions were in line with a previous judgment by a Bench of Three Members, which was not considered in the previous case cited. Consequently, the Tribunal set aside the impugned order, stating that the appellant had complied with the pre-deposit direction in the stay order. The matter was remanded to the Commissioner (Appeals) for a decision on merits, and the stay application and appeal were disposed of accordingly.