2000 (6) TMI 302 - AT - Central Excise

Summary

Issues:
Dispensation of payment of duty for hearing appeal and stay of recovery, eligibility of Modvat credit on various inputs, financial hardship of the applicant.

Dispensation of Payment of Duty and Stay of Recovery:
The appellant, NRC Ltd., sought dispensation of duty payment as a condition for hearing its appeal and stay of recovery by the department. The appeal was against the disallowance of Modvat credit and imposition of a penalty. The appellant argued that the items in question were capital goods essential for the manufacturing process, making them eligible for Modvat credit. The appellant highlighted the financial crisis faced, emphasizing the adverse market conditions affecting their operations. The appellant also mentioned the partial stay granted by the Commissioner (Appeals) on a previous deposit. The Tribunal considered the arguments and directed a pre-deposit of Rs. 30,000, acknowledging the arguable nature of the Modvat credit eligibility for certain inputs.

Eligibility of Modvat Credit on Various Inputs:
The appellant presented a chart showing the usage of inputs and cited relevant case laws supporting their claim for Modvat credit on the inputs considered as capital goods. The Counsel for the appellant argued for a waiver of pre-deposit based on the nature of the inputs. The Respondent, however, contended that certain inputs were not covered by the cited rulings and required pre-deposit as per the impugned order. The Tribunal examined the impugned order, the arguments, and the cited rulings. It found the matter arguable for some inputs and directed a pre-deposit of Rs. 30,000 considering the circumstances.

Financial Hardship of the Applicant:
The appellant claimed financial hardship due to market conditions and losses incurred, seeking relief from making the pre-deposit. However, the Tribunal noted the lack of substantiated material regarding the extent of the losses and the general nature of the statements. Considering the appellant's compliance with previous orders by depositing a significant amount, the Tribunal concluded that the appellant was not in a severe financial position to warrant complete waiver of the pre-deposit. As a result, the Tribunal allowed the application in part, directing a pre-deposit of Rs. 30,000 within a specified timeframe, staying the recovery of the balance amount and penalty.

In conclusion, the judgment addressed the issues of dispensation of duty payment, eligibility of Modvat credit on various inputs, and the financial hardship of the appellant, ultimately directing a partial waiver with a specific pre-deposit amount based on the arguable nature of the Modvat credit eligibility for certain inputs.