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Home Case Index All Cases Central Excise Central Excise + AT Central Excise - 2014 (6) TMI AT This

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2014 (6) TMI 303 - AT - Central Excise


Issues involved:
- Waiver of pre-deposit of duty and penalty under Section 11A C of the Central Excise Act, 1994
- Irregular availment of cenvat credit on inputs without receiving materials from job workers
- Allegations of passing purported credit to consignees on the guise of duty paid on finished goods
- Non-compliance with prescribed procedures under Notification 214/86-CE dated 25.03.1986
- Financial hardship plea by the applicant

Analysis:
1. The applicant filed for waiver of pre-deposit of duty and penalty, contesting allegations of irregular cenvat credit availment without receiving input materials from job workers. The Department's case was based on the lack of engagement of job workers as claimed by the Director, supported by inspection findings of old machines, low electricity consumption, and minimal workforce presence.

2. The applicant argued they maintained meticulous records, received raw materials from reputable sources, and dispatched finished goods to customers after job work. They refuted the inspection report's presumptive nature and highlighted proper utilization of machinery for manufacturing engineering equipment in adherence to design specifications.

3. The Department presented statements indicating discrepancies, such as the Director's admission of not issuing challans to job workers and job workers confirming no orders from the applicant. The Chartered Engineer's report criticized the lack of essential records for regular production, questioning the factory's operational efficiency.

4. The Tribunal noted the absence of engaged job workers, contradictory statements regarding goods receipt, and discrepancies in transportation arrangements. Considering the balance of convenience and lack of evidence supporting financial hardship, the Tribunal directed a 25% pre-deposit of total duty within eight weeks, with remaining dues waived upon compliance, pending appeal. Failure to comply would result in dismissal of the appeal without further notice.

 

 

 

 

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