Restricted Cenvat credit use under the same levy led to partial stay and rejection of the limitation plea.

Rule 3(6)(b) of the Cenvat Credit Rules was read as restricting use of credit of Additional Duty of Excise under the Textiles and Textile Articles levy to payment of duty under the same levy, so utilisation for another enactment was treated as impermissible and no prima facie case was found for complete waiver of pre-deposit. The Tribunal also rejected the interim limitation plea because the statutory records reflected only a consolidated figure and did not establish a prima facie time bar. As a result, full waiver was declined and only partial relief was granted with deposit of a reduced amount and stay for the balance pending appeal.

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Issues: (i) Whether the appellant had made out a prima facie case for waiver of pre-deposit and stay by contending that credit of Additional Duty of Excise under the Textiles and Textile Articles levy could be utilised for payment of another duty. (ii) Whether the demand was prima facie barred by limitation.

Issue (i): Whether the appellant had made out a prima facie case for waiver of pre-deposit and stay by contending that credit of Additional Duty of Excise under the Textiles and Textile Articles levy could be utilised for payment of another duty.

Analysis: The relevant credit restriction was treated as explicit. The Tribunal read Rule 3(6)(b) of the Cenvat Credit Rules as permitting use of the specified additional duty credit only towards payment of duty of excise leviable under the same levy. On that construction, utilisation of such credit for payment of duty under a different enactment was viewed as impermissible. The Tribunal therefore found no prima facie case in favour of the applicant for complete waiver.

Conclusion: The issue was decided against the appellant and in favour of Revenue.

Issue (ii): Whether the demand was prima facie barred by limitation.

Analysis: The limitation plea was rejected at the interim stage because the statutory records disclosed only a consolidated figure, which did not establish a prima facie bar of time.

Conclusion: The limitation objection was rejected.

Final Conclusion: The appellant was not entitled to full waiver of pre-deposit, and only partial relief was granted by directing deposit of a reduced amount with corresponding stay for the balance during the pendency of the appeal.

Ratio Decidendi: Where the governing credit rule expressly restricts utilisation of a specified additional duty credit to the same levy, such credit cannot be treated as freely available for payment of duty under another enactment, and interim waiver of pre-deposit may be confined accordingly.

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