2005 (11) TMI 80 - HC - Central Excise

Summary

Issues:
Challenge to interim order by CESTAT on pre-deposit of duty demanded.

Analysis:
The petitioner, a cement manufacturing company availing Cenvat credit, faced a demand of Rs. 1,16,14,350/- for allegedly ineligible credit on various items. The Commissioner disallowed the credit and imposed a penalty of Rs. 40 lacs, confirmed by an order dated 24th March, 2005. The petitioner appealed to the CESTAT seeking a complete waiver of pre-deposit. The Tribunal partially waived the pre-deposit, directing the petitioner to deposit 50% of the duty amount within eight weeks. The Tribunal found certain items like platforms, ladder, shed, and bunker ineligible for Cenvat credit, leading to the decision for partial waiver.

The High Court, while considering the writ petition challenging the Tribunal's order, emphasized that the decision to waive pre-deposit lies within the Tribunal's discretion. The Court stated that interference is not warranted unless the discretion is exercised arbitrarily. The Court noted that the Tribunal had prima facie considered the items in question and found some ineligible for Cenvat credit. The Court upheld the Tribunal's decision, stating that the Tribunal was not required to examine each of the 91 items individually. The Court found no fault in the Tribunal's decision to waive 50% of the duty amount, as the petitioner did not demonstrate financial hardship for a total waiver.

The Court dismissed the writ petition but extended the time for pre-deposit by four weeks from the date of the judgment. The Court's decision was based on the understanding that the Tribunal's order was valid and that the petitioner had not provided sufficient grounds for a complete waiver of duty.