2014 (11) TMI 241 - AT - Central Excise

Waiver of pre-deposit of duty - Availment of credit of duty paid on the material without any document - Held that - duty paid SIM cards which were found to be defective were received in the factory and credit was availed on the duty paid on such SIM cards and subsequently the same after rectification of the defects were cleared on payment of appropriate duty, the applicant had a strong case for waiver of pre-deposit of the dues. The pre-deposit of the dues is waived and recovery thereof stayed for hearing the appeal - Stay granted.

Summary

Issues:
- Application for waiver of pre-deposit of duty
- Availment of credit without valid duty paying documents
- Clearance of programmed SIM cards without payment of duty

Analysis:
The judgment addresses an application for waiver of pre-deposit of duty amounting to Rs. 43,03,398/- and Rs. 3,52,631/-, interest, and penalty. The demand for duty of Rs. 43,03,398/- was confirmed due to the applicant availing credit of duty paid on material without proper documentation. The applicant argued that defective SIM cards were received in the factory, credit was taken on duty paid for these cards, and after rectification, they were cleared by paying appropriate duty. Regarding the demand of Rs. 3,52,631/-, the applicant claimed that programmed SIM cards were cleared after rectification without availing credit on the duty paid initially. The Revenue contended that credit was taken without valid duty paying documents and programmed SIM cards were cleared without duty payment, justifying the demands. However, considering that duty paid SIM cards found defective were rectified and cleared after paying appropriate duty, the Tribunal found merit in waiving the pre-deposit of dues, allowing a stay on recovery for the appeal hearing. The stay petition was granted, and the appeal was scheduled for final hearing on a specified date.

This judgment highlights the importance of proper documentation for availing credit on duty paid materials and the necessity of paying appropriate duty for cleared goods. It emphasizes the Tribunal's discretion to waive pre-deposit based on the circumstances of the case, such as rectification of defects and subsequent duty payment. The decision showcases the balancing act between taxpayer compliance and Revenue enforcement, ultimately aiming for a fair resolution through legal proceedings.