2014 (10) TMI 275 - AT - Central Excise

Waiver of pre-deposit - availment of in-eligible CENVAT Credit - Held that - appellant herein is a manufacturer of insecticides for various purchasers and manufactured the same out of the raw materials and packing material supplied by such companies. Appellant herein discharges the Central Excise duty on such insecticides on the value as declared by the raw material supplier and it is not in dispute that appropriate duty was discharged. We prima facie find that the appellant being a manufacturer of final goods, if discharges appropriate Central Excise duty, denial of CENVAT Credit of Excise duty on the inputs and services rendered during the manufacturing activity of the final product, seems to be incorrect as the adjudicating authority has mis-directed his finding on the ground that the records maintained by the appellant were of raw material suppliers. Prima facie, the records which were produced before us and on perusal, we find that these records indicated the quantity of the inputs and CENVAT Credit available on such inputs on the raw materials and packing materials supplied by the company who got their goods i.e. insecticides manufactured from the appellant. Prima facie, we are of the opinion that the main appellant as well as all other appellants have made out a strong case for waiver of pre-deposit of amounts involved in these Stay Petitions - Stay granted.

Summary

Issues:
Stay petitions for waiver of pre-deposit of duty liability, interest, and penalties; Availment of ineligible CENVAT Credit; Denial of CENVAT Credit by the adjudicating authority; Correctness of maintaining records by the appellant; Prima facie findings regarding CENVAT Credit denial; Request for waiver of pre-deposit granted; Expedited disposal of appeals requested by both parties.

Analysis:
The Stay Petitions were filed seeking a waiver of pre-deposit of duty liability, interest, and penalties confirmed on all appellants based on the same impugned Order-in-Original. The adjudicating authority found that the main appellant had availed ineligible CENVAT Credit and filed rebate claims that were rejected and manipulated. It was concluded that the appellants had availed CENVAT Credit on behalf of entities not registered for duty payment on goods manufactured by them.

During the hearing, the appellant's representatives provided details of the manufacturing process and the maintenance of registers to clarify the goods manufactured for different companies. The Departmental Representative reiterated the findings of the adjudicating authority. Upon careful consideration of submissions and record perusal, the Tribunal found the issue to be a non-starter. It was acknowledged that the appellant, a manufacturer of insecticides, paid Central Excise duty on the manufactured goods based on the raw material supplier's declared value, with appropriate duty discharge. The Tribunal prima facie disagreed with the denial of CENVAT Credit, noting that the records indicated the quantity of inputs and available CENVAT Credit on materials supplied by the companies for whom the goods were manufactured.

Consequently, the Tribunal held that the appellants had made a strong case for the waiver of pre-deposit amounts involved in the Stay Petitions. The applications for waiver were allowed, and recovery was stayed pending appeal disposal. Both parties requested an expedited hearing due to the substantial amounts involved, which the Tribunal granted, directing the appeals to be listed for disposal on a specified date.