2014 (8) TMI 249 - AT - Central Excise

Waiver of duty - Availment of CENVAT Credit - common input and input services - Held that - Admittedly, the Applicant had availed the CENVAT Credit on inputs and input services, which were used in or in relation to the manufacture of both dutiable and exempted final products. It is also not in dispute that the Applicant had neither maintained separate records nor exercised their option for reversal of the proportionate CENVAT Credit, attributable to inputs that were used in the manufacture of inputs/input services of the exempted goods as per Rule 6(3)(ii) of the CENVAT Credit Rules, 2004. Also, prima facie, we find that the Department in computing the proportionate credit on inputs/input services, found a difference of around ₹ 39.45 and ₹ 21.03 on credit on input service, based on the report of the field formation, a copy of which was not handed over to the Applicant. There is no dispute about the reversal of the total CENVAT Credit of ₹ 56,85,699/- on inputs and ₹ 3,53,768/- on input services, attributable to the exempted final products. In the above circumstances, the amount reversed at this stage, in our opinion, is sufficient to hear their Appeal. Consequently, pre-deposit of balances dues adjudged would stand waived and its recovery stayed during the pendency of the Appeal - Stay granted.

Summary

Issues Involved:
Application seeking waiver of duty and penalty under CENVAT Credit Rules, 2004.

Analysis:
The judgment deals with an Application seeking waiver of duty and penalty imposed under Rule 15(2) of the CENVAT Credit Rules, 2004 read with Section 11AC of the Central Excise Act, 1944. The Applicant had availed CENVAT Credit on inputs and input services used in the manufacture of both dutiable and exempted final products but had not maintained separate records as required by Rule 6(3) of the CENVAT Credit Rules, 2004. The Applicant had reversed a proportionate credit on inputs and input services attributable to exempted products. However, the Department disputed the quantification of the proportionate credit. The Tribunal noted that the Department's quantification was based on a report not provided to the Applicant, and there were discrepancies in the calculation. Despite this, the Tribunal found that the amount reversed by the Applicant was sufficient to hear their Appeal, and thus, waived the pre-deposit of the balance dues and stayed its recovery during the pendency of the Appeal.

In conclusion, the Tribunal acknowledged the Applicant's compliance with reversing a proportionate credit on inputs and input services attributable to exempted final products. The Tribunal found discrepancies in the Department's quantification of the proportionate credit and noted that the Applicant had reversed a significant amount already. Therefore, the Tribunal allowed the Stay Petition, waiving the pre-deposit of the balance dues and staying its recovery during the pendency of the Appeal.