2014 (1) TMI 783 - AT - Central Excise

Reversal of Cenvat credit to be made Capital goods used for manufacturing Briquette - Waiver of Pre-deposit Held that - Briquette is manufactured separately and he has also indicated the process of manufacturing of Briquette and use - the Circular dated 25.09.2002 specifically talks about non denial of cenvat credit on the capital goods used in the manufacturing of intermediate goods, which are exempted from payment of duty and are used captively in the manufacture of finished goods chargeable to duty - Briquettes are manufactured in the factory premises which is further utilised for the manufacturing of final product soda ash - the appellant has made out a prima facie case for the waiver of pre-deposit of amount till the disposal Stay granted.

Summary

Issues:
Stay petitions for waiver of pre-deposit of duty for availing cenvat credit on capital goods used in manufacturing Briquette for making Soda Ash.

Analysis:
The appellant filed stay petitions seeking the waiver of pre-deposit of duty for utilizing cenvat credit on capital goods used in manufacturing Briquette, which is further used in the production of Soda Ash. The counsel for the appellant referred to a Board circular and various tribunal decisions to support the claim that Briquette is an intermediate product. On the contrary, the Additional Commissioner argued that Briquette is a separate product not arising during the manufacturing of Soda Ash. After considering the arguments and perusing the record, it was observed that the first appellate authority acknowledged that Briquette is manufactured separately and used in the kiln for making Soda Ash. The Circular dated 25.09.2002 exempts cenvat credit on capital goods used in manufacturing exempted intermediate goods for producing chargeable finished goods. Drawing an analogy with electricity production, where credit was allowed for duty paid on capital goods, the Tribunal found the appellant eligible for the waiver of pre-deposit, staying the recovery until the appeal's disposal.

This judgment primarily dealt with the classification of Briquette as either an intermediate product or a separate product in the context of availing cenvat credit on capital goods. The Tribunal analyzed the manufacturing process, usage, and applicability of relevant circulars and precedents to determine the eligibility of the appellant for the waiver of pre-deposit. The decision emphasized the importance of the production chain and the utilization of goods in the manufacturing process to establish the eligibility for cenvat credit. The Tribunal's ruling highlighted the need for a thorough investigation into the nature of the product and its role in the manufacturing process to make an informed decision regarding the waiver of pre-deposit.

In conclusion, the judgment provided a detailed analysis of the arguments presented by both parties regarding the classification of Briquette and its impact on the appellant's eligibility for cenvat credit on capital goods. By referencing relevant circulars, tribunal decisions, and applying analogies to similar cases, the Tribunal justified its decision to grant the appellant the waiver of pre-deposit, emphasizing the importance of the product's role in the manufacturing process and its eligibility for cenvat credit.