2013 (10) TMI 1043 - AT - Central Excise

Eligibility of Cenvat Credit Waiver of Pre-deposit of Penalty under Rule 15 (2) of CC Rules, r.w Section 11AC of CEA - Held that - Following Vandana Global Ltd. Versus CCE 2010 (4) TMI 133 - CESTAT, NEW DELHI (LB) - The Tribunal has been taking a consistent view allowing the stay application of the assesses where extended period of limitation is invoked and directed pre-deposit where normal period is involved thus the applicant is directed to deposit 25% of the demand involved for normal period upon such submission balance dues would stand waived and its recovery stayed during the pendency of the appeal Partial stay granted.

Summary

Issues:
1. Waiver of pre-deposit of Cenvat Credit and penalty.
2. Eligibility of Cenvat Credit on specific items.
3. Barred demand by limitation.
4. Applicability of Larger Bench decision in Vandana Global case.

Analysis:
The judgment revolves around an application seeking waiver of pre-deposit of Cenvat Credit and penalty amounting to Rs.58,22,335/- imposed under Rule 15(2) of Cenvat Credit Rules, read with Section 11AC of CEA, 1944. The applicant claimed Cenvat Credit on various items like M.S. Joists, M.S. Channels, M.S. Angles, M.S. Plate, M.S. Beam, H.R. Plate falling under Chapter 72, stating their usage in the factory as structures and other items. It was contended that a portion of the demand is time-barred, with only around Rs.14.00 Lakhs falling within the normal period.

The Ld. Advocate for the Revenue acknowledged that the demand pertained to the period from August 2005 to June 2010, with a show cause notice issued on 12/08/2010, thereby indicating that a significant portion of the demand was indeed barred by limitation. The Ld. Advocate did not contest the fact that the demand within the normal period amounted to approximately Rs.14 Lakhs. Upon hearing both parties and examining the records, the Tribunal identified the key issue concerning the eligibility of Cenvat Credit on the mentioned items as capital goods/inputs and the relevance of the Larger Bench decision in the Vandana Global case reported in 2010 (253) ELT 440 (Tri-LB).

The Tribunal noted its consistent practice of allowing stay applications for assesses when an extended period of limitation is invoked, while directing pre-deposit for the normal period. Consequently, the Tribunal directed the applicant to deposit 25% of the Rs.14.00 Lakhs demanded for the normal period within six weeks from the date of the judgment. Upon this deposit, the remaining dues would be waived, and the recovery stayed during the pendency of the appeal. The applicant was required to report compliance by a specified date, ensuring procedural adherence and timely actions in the case.