2013 (10) TMI 173 - AT - Central Excise

Cenvat Credit - Benefit of Notification No.4/2006 Credit on Craft Paper - Waiver of Pre-deposit - The applicant was engaged in the manufacture of printed labels and printed cartons - They availed credit on the kraft paper used in the manufacture of their final product - Credit was denied on the ground that supplier of craft paper should have availed the exemption notification - Held that - The Tribunal in the case of Sripathi Paper and Boards Pvt. Ltd. Vs CCE Tirunelveli 2011 (3) TMI 102 - CESTAT, CHENNAI granted unconditional stay - the applicant was engaged in the manufacture of craft paper and paid concessional rate of duty under Exemption Notification No.4/2006-CE instead of claiming NIL rate of duty under Sl.No.90 of the Table appended to the said notification and the Tribunal observed prima facie that assessee was eligible to pay concessional rate of duty - Prima facie credit cannot be denied on the ground that supplier had not availed the exemption notification - stay granted.

Summary

Issues:
1. Application for waiver of predeposit of duty and interest.
2. Denial of credit on the ground that supplier had not availed the exemption notification.

Analysis:

Issue 1: Application for waiver of predeposit of duty and interest

The judgment pertains to two applications for waiver of predeposit of duty and interest. M/s. The Orient Litho Press filed an application seeking waiver of predeposit of duty amounting to Rs.44,649/- along with interest. The advocate representing the applicant informed the court that the entire duty amount has been deposited and requested waiver of predeposit of interest only. On the other hand, M/s. Lovely Offset Printers (P) Ltd. also filed a similar application for waiver of duty of Rs.46,909/- along with interest. The advocate for Lovely Offset Printers argued that the denial of credit was based on the supplier's failure to avail the exemption notification. He cited a previous Tribunal order in the case of Sripathi Paper and Boards Pvt. Ltd. where unconditional stay was granted, indicating that the assessee was eligible for concessional rate of duty under a specific exemption notification.

Issue 2: Denial of credit on the ground that supplier had not availed the exemption notification

After considering the submissions from both sides, the Tribunal concluded that prima facie credit cannot be denied solely on the basis that the supplier had not availed the exemption notification. The Tribunal referred to the case of Sripathi Paper and Boards Pvt. Ltd. where a similar situation had been addressed, and a favorable decision was made in granting concessional rate of duty. Consequently, the Tribunal granted waiver of predeposit of interest for M/s. The Orient Litho Press and waiver of predeposit of duty and interest for Lovely Offset Printers (P) Ltd. during the pendency of the appeals. The Tribunal allowed both stay applications, emphasizing that credit denial should not be solely based on the supplier's failure to avail the exemption notification.

This judgment highlights the importance of considering the merits of each case individually and not denying credit arbitrarily based on technical grounds. The Tribunal's decision to grant waivers and stays reflects a fair and just approach towards the applicants, ensuring that their interests are protected during the appeal process.