2015 (10) TMI 723 - HC - Central Excise

Denial of exemption under notification dated 23.7.1996 - Captive consumption - Held that - Tribunal held that the assessee has good prima facie case on merit and accordingly granted unconditional stay on an application filed by the assessee for waiver of pre-deposit - There is no merit in the instant appeal and the same is hereby dismissed. - Decided against Revenue.

Summary

Issues:
1. Justification of Tribunal's view on the same issue for subsequent periods
2. Granting of stay by the Tribunal under specific circumstances
3. Granting unconditional stay based on prima facie case without considering revenue's interest

Analysis:
1. The appeal was filed by the revenue under Section 35G of the Central Excise Act, 1944 against the order passed by the Customs, Excise and Service Tax Appellate Tribunal. The substantial questions of law raised included the Tribunal's justification for taking a contrary view on the same issue for subsequent periods related to the same respondent. The appellant questioned the reliance placed on a previous Apex Court judgment by the Tribunal, which had been discussed and distinguished in an earlier decision. The Tribunal had granted stay after deliberations in favor of the revenue, prompting the appellant to challenge the decision.

2. The facts revealed that the assessee, engaged in manufacturing bulk drugs, availed cenvat credit and claimed duty exemption under a specific notification. Show cause notices were issued for different periods, raising a demand which was confirmed by the adjudicating authority. The assessee appealed to the Tribunal, which allowed the stay application without pre-deposit of dues, leading to the current appeal by the revenue. The revenue contended that the Tribunal had granted unconditional stay without safeguarding its interests, emphasizing the contradictory views taken by the Tribunal on the same issue for subsequent years.

3. The Tribunal, in its decision, noted that the issue was covered by a Larger Bench's decision upheld by the Supreme Court. It found that the appellant had a good prima facie case on merit, leading to the dispensation of the pre-deposit condition and the grant of unconditional stay. The Tribunal emphasized the merit of the assessee's case in granting the stay, which was challenged by the revenue. Ultimately, the High Court dismissed the appeal, upholding the Tribunal's decision to grant unconditional stay based on the prima facie case's strength. The Tribunal was directed to expedite the appeal's disposal in accordance with the law.