2013 (11) TMI 235 - AT - Central Excise

CENVAT Credit inputs where date of use expired before receiving the goods - Waiver of Pre-deposit Held that - The appellant has reversed the entire cenvat credit and the interest - But this reversal is done after the issuance of show cause notice -Prima facie the appellant has not made out a strong case for the complete waiver of the amounts of penalties involved as in the first place, the cenvat credit availed by the appellant on the dated expired goods is in violation of the provisions of Central Excise Rules, 2002, in as much as they being in the business for decades, should have known that date expired manufactured insecticides seldom can be re-processed or re-manufactured. All the legal issues raised needs consideration in depth, which can be done only at the time of final disposal of the appeal - the appellant is directed to deposit an amount of Rs.1,00,000 as pre-deposit upon such submission rest of the duty to be waived till the disposal Partial stay granted.

Summary

Issues:
Waiver of pre-deposit of ineligible cenvat credit, interest, and penalty confirmed by adjudicating authority and first appellate authority.

Analysis:
The appellant, engaged in manufacturing insecticides, sought waiver of pre-deposit for cenvat credit availed on date expired goods. The appellant claimed intention to process the goods but ultimately reversed the credit post-show cause notice. The Tribunal noted the violation of Central Excise Rules, 2002, considering the appellant's experience in the industry and the impracticality of re-processing date expired insecticides. The Tribunal acknowledged the need for detailed consideration of legal issues but directed the appellant to deposit Rs.1,00,000 within four weeks and report compliance. Upon compliance, the waiver of pre-deposit for the remaining amounts was allowed, with recovery stayed until appeal disposal.

This judgment primarily addresses the issue of waiver of pre-deposit concerning cenvat credit on date expired goods. The Tribunal recognized the appellant's reversal of credit post-show cause notice but emphasized the violation of Central Excise Rules due to the impracticality of re-processing date expired insecticides. The Tribunal's decision to allow waiver subject to a deposit and compliance timeline aimed to balance the interests of the appellant and the legal requirements, ensuring justice while addressing the violation.

The judgment delves into the legal complexities surrounding the availing and reversal of cenvat credit on date expired goods by the appellant. Despite acknowledging the appellant's actions post-show cause notice, the Tribunal highlighted the appellant's industry experience and the regulatory framework under the Insecticides Act. The Tribunal's directive for a deposit and compliance mechanism reflected a nuanced approach to address the violation while facilitating a fair consideration of legal issues during the appeal process.

Overall, the judgment provides a detailed analysis of the waiver of pre-deposit sought by the appellant for cenvat credit on date expired goods. By considering the regulatory framework, the appellant's actions, and the need for detailed legal scrutiny, the Tribunal's decision to allow waiver subject to conditions demonstrated a balanced approach to uphold legal standards while ensuring procedural fairness and justice in the appeal process.