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2013 (10) TMI 333 - AT - Central ExciseCENVAT Credit Waiver of Pre-deposit - Revenue was of the view that the credit represents excess amount of duty paid by their supplier in as much as while the supplier were required to discharge the duty liability @ 10%, they had paid the duty @ 14% - Held that - CCE vs. MDS Switchgear Ltd. 2008 (8) TMI 37 - SUPREME COURT - the Cenvat credit at the recipients end cannot be denied by seeking reassessment of the duty at the suppliers end - when the job worker had paid duty even though he was not required to pay the duty, the Cenvat credit cannot be denied to the assessee who had received the duty paid goods from the job worker Prima facie the appellant have a strong prima facie in their favour - stay granted.
Issues:
1. Denial of Cenvat credit by the Department based on excess duty paid by the supplier. 2. Appeal against the order-in-original confirming the Cenvat credit demand, interest, and penalty. 3. Stay application for waiving the requirement of pre-deposit during the appeal. Analysis: 1. The Department sought to deny Cenvat credit of Rs. 52,395/- taken during 2008-2009, alleging that the credit represented an excess amount of duty paid by the supplier. The Jurisdictional Assistant Commissioner confirmed this denial along with interest and imposed a penalty, which was upheld by the Commissioner (Appeals). The appellant filed an appeal against this decision, along with a stay application. 2. The appellant's counsel argued that Cenvat credit at the receiver unit cannot be denied based on the duty assessment at the supplier's end, citing the judgment of the Hon'ble Punjab & Haryana High Court in the case of Commissioner vs. Ranbaxy Labs Ltd. The counsel contended that the appellant had a strong prima facie case, requesting the waiver of pre-deposit for the Cenvat credit demand, interest, and penalty during the appeal. 3. The Joint CDR opposed the stay application, reiterating the Commissioner (Appeals)'s findings. However, the presiding judge, referring to the Supreme Court's decision in the case of CCE vs. MDS Switchgear Ltd. and the Punjab & Haryana High Court's ruling in Commissioner vs. Ranbaxy Labs Ltd., held that Cenvat credit at the recipient's end cannot be denied based on the duty reassessment at the supplier's end. Consequently, the judge waived the requirement of pre-deposit for the Cenvat credit demand, interest, and penalty, allowing the stay application and staying the recovery during the appeal proceedings. This judgment highlights the importance of established legal principles in determining the eligibility of Cenvat credit and the significance of precedent in supporting the appellant's case for the waiver of pre-deposit during the appeal process.
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