2013 (8) TMI 23 - AT - Central Excise

Pre-deposit - Cenvat credit on inputs was availed by the assessee and cleared to sister unit who is a registered dealer without reversing credit assessee submitted that while clearing such inputs, they have paid the duty based on transaction value. He submits that during such clearances, there is excess payment of duty and also there is short payment of duty if compared with the Cenvat credit that needs to be reversed - Inputs cleared by the appellant to one M/s. M.B. Enterprises who is a registered dealer and he has cleared these inputs to another registered dealer and, the second registered dealer has sold the same inputs back to the appellant Held that - Entire issue needs to be gone into detail which can be done only at the final disposal of appeal. Keeping in mind that appellant has paid an amount of Rs. 5.38 Lakhs, main appellant to further deposit an amount of Rs. 5,00,000/- (Rupees five lakhs only) within eight weeks.

Summary

Issues:
Waiver of pre-deposit of confirmed duty, interest, and penalties under Cenvat Credit Rules, 2004 and Central Excise Rules.

Analysis:
The judgment pertains to stay petitions seeking the waiver of pre-deposit of an amount confirmed as duty, interest, and penalties under Cenvat Credit Rules, 2004, and Central Excise Rules. The primary issue revolves around the differential duty payable on inputs cleared without reversing the actual amount involved. The appellant, represented by a Chartered Accountant, claimed that duty was paid based on transaction value during clearances to a registered dealer, resulting in excess and short payment of duty compared to the cenvat credit that should have been reversed. The Tribunal noted the complexity of the transactions involving the clearance of inputs to a registered dealer, subsequent transactions, and the lack of clarity on why the exact cenvat credit amount was not reversed. Recognizing the need for detailed consideration, the Tribunal directed the appellant to deposit a specified amount within a set timeframe, with further compliance requirements. The Tribunal allowed the waiver of pre-deposit for the balance amounts pending the final disposal of appeals, subject to compliance with the deposit directive.

In summary, the judgment addresses the issue of pre-deposit waiver concerning confirmed duty, interest, and penalties under relevant excise rules. It highlights the complexities in the transactions involving the clearance of inputs and the necessity for detailed examination before final disposal of the appeal. The Tribunal's decision to direct a specific deposit amount and outline compliance steps reflects a balanced approach to the issue at hand, ensuring fairness and procedural adherence in the resolution of the matter.