Cenvat Credit recovery under Rule 12 applies to manufacturers, not dealers, supporting waiver of pre-deposit and stay of recovery.

Rule 12 of the Cenvat Credit Rules, 2004 was read as providing recovery of wrongly taken Cenvat credit from a manufacturer, not from a dealer, because the rule did not refer to dealers. On that interpretation, the Tribunal held that the appellants, being dealers in grey fabrics, had made out a strong prima facie case for interim protection in the proceedings concerning alleged wrong credit. Pre-deposit was waived and recovery was stayed.

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Issues: Whether the appellants were entitled to waiver of pre-deposit and stay of recovery in proceedings for recovery of Cenvat credit allegedly taken wrongly by a dealer under Rule 12 of the Cenvat Credit Rules, 2004.

Analysis: The appellants were dealers in grey fabrics and the proceedings sought recovery of credit allegedly wrongly taken by them under Rule 12. The Tribunal noted that Rule 12 contemplated recovery of wrongly taken Cenvat credit from the manufacturer only and that the word "dealer" was absent from the rule. On that basis, the Tribunal found that a strong prima facie case was made out in favour of the appellants for interim relief.

Conclusion: Pre-deposit was waived and recovery was stayed, and the application was allowed.

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