Cenvat credit on supplementary invoices failed where capital goods were free-issued and the appellant was not acting as a job worker.

Cenvat credit on supplementary invoices was found unsupported because the capital goods were transferred free of cost and the documents showed the appellant was to manufacture components as a vendor, not as a job worker. The credit claim was examined against the provisions applicable on the date of the supplementary invoices, including rules relating to lease, hire-purchase, loan arrangements and job-work movement of capital goods. As no prima facie entitlement to credit was established, the request for total waiver of pre-deposit of the confirmed duty demand and penalty was rejected.

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Issues: Whether the appellant made out a prima facie case for total waiver of pre-deposit of the confirmed duty demand and penalty in proceedings concerning availment of Cenvat credit on supplementary invoices.

Analysis: The claimed credit was examined against the governing credit provisions applicable to the date of the supplementary invoices and the nature of the transaction. The capital goods had been transferred free of cost and the supporting documents showed that the appellant was to manufacture components as a vendor, not as a job worker. On that basis, the credit claim was found not supportable under the cited credit provisions, including the provisions relating to lease, hire-purchase, loan arrangements and job-work based movement of capital goods. As no prima facie entitlement to the credit was established, the request for complete waiver of pre-deposit could not be accepted.

Conclusion: The appellant was held not entitled to total waiver of pre-deposit.

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