Pre-deposit relief in Cenvat credit dispute: Tribunal ordered partial deposit and stayed the balance pending appeal.

In a stay application concerning utilisation of service tax credit to pay central excise duty, the Tribunal examined only prima facie relief at the pre-deposit stage. It noted that the merits of the entitlement to use the credit under the Cenvat Credit Rules, 2004 would be decided in the appeal, and therefore directed deposit of only part of the disputed duty. The balance duty demand and the penalty were stayed until final adjudication, leaving the underlying admissibility and utilisation of credit open for determination.

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Issues: Whether the appellant was entitled to waiver of pre-deposit in respect of the disputed duty and penalty pending disposal of the appeal.

Analysis: The application arose from a dispute over utilisation of service tax credit for payment of central excise duty, with the Department relying on Rule 11 of the Cenvat Credit Rules, 2004 and the appellant relying on the amended credit provisions governing input service. The relief sought was considered only at the stage of pre-deposit, and the merits of the entitlement to utilise the credit were left for final hearing. On the material available, only a part of the disputed duty was directed to be deposited, with the balance and the penalty stayed till the appeal was decided.

Conclusion: The appellant was granted only partial waiver of pre-deposit, and the application succeeded to that limited extent.

Final Conclusion: Interim relief was granted in part, but the dispute on the underlying admissibility and utilisation of credit remained open for adjudication in the appeal.

Ratio Decidendi: In a stay application, where the merits require detailed examination, the Tribunal may direct partial pre-deposit and waive the balance pending appeal.

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