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of <h1>Appellant's Challenge on Cenvat Credit Disallowance & Penalty Imposition; Waiver Arguments & Interim Stay</h1> <h3>RSWM Versus COMMISSIONER OF C. EX., JAIPUR-II</h3> The appellant challenged the disallowance of Cenvat credit and penalty imposition, arguing for waiver of pre-deposit based on a Division Bench reference. ... Stay/Dispensation of pre-deposit - Cenvat/Modvat - Penalty Issues involved: Challenge to disallowance of Cenvat credit and penalty imposition u/s Rule 15(3) of the Cenvat Credit Rules, 2004; Interpretation of place of removal for goods sold at port.Challenge to disallowance of Cenvat credit and penalty imposition: The appellant contested the order disallowing Cenvat credit and imposing a penalty. The appellant argued for waiver of pre-deposit based on a Division Bench reference and interim orders in similar cases. The Division Bench's differing view does not establish conflicting judicial precedents until overruled by a Larger Bench. The referral order does not constitute a judgment or decision laying down any ratio, and disagreement for referral purposes does not automatically warrant a waiver of pre-deposit under Section 35F. The binding effect of the earlier coordinate bench remains until overruled, and differing opinions in referral orders do not necessitate automatic waiver of pre-deposit.Interpretation of place of removal for goods sold at port: The appellant contended that since the goods were sold at the port, the place of removal should not be considered the factory. The adjudicating authority's finding that the place of removal is the 'factory gate' even if goods were sold on FOR destination basis and property transferred at the port raises a prima facie argument. A CBEC circular clarified that if property transfer occurs at a different place, credit of service tax on transportation up to that point is admissible. As the property was transferred to the buyer at the port in this case, a prima facie case for waiver of pre-deposit is established. Consequently, an interim stay was granted against the recovery of Cenvat credit and penalty during the appeal's pendency without requiring pre-deposit, with the appeal set for final hearing in due course.
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