Cenvat credit and captive power plant dispute: pre-deposit waived and recovery stayed pending Larger Bench reference.

Interim protection was granted in a Cenvat credit dispute concerning whether a transferred power plant continued to qualify as the appellant's captive power plant and whether Rule 6(3)(b) of the Cenvat Credit Rules, 2002 applied. The Tribunal noted that the core issue was already pending before a Larger Bench in another matter and recorded a prima facie view that, after sale of assets to a separate company, the plant may no longer be treated as captive, while also noticing contrary prior reasoning. On that basis, pre-deposit of duty and penalty was dispensed with and recovery was stayed pending the Larger Bench decision.

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Issues: Whether the appellant was entitled to waiver of pre-deposit and stay of recovery pending reference of the common issues to a Larger Bench; whether the dispute concerning treatment of the power plant as a captive power plant and the applicability of Rule 6(3)(b) of the Cenvat Credit Rules, 2002 required consideration by a Larger Bench.

Analysis: The appellant's challenge involved two connected questions arising from transfer of assets to a newly formed subsidiary and the consequent treatment of clearances and credit. On the first issue, the subject matter was already pending before a Larger Bench in another matter involving the same legal question under Rule 6(3)(b) of the Cenvat Credit Rules, 2002. On the second issue, the Tribunal recorded a prima facie view that the power plant, after transfer of assets by sale to a separate company, may not continue to be treated as the appellant's captive power plant, though it also noticed contrary reasoning in an earlier decision of the Tribunal in the appellant's own case. In view of the similarity of issues and the need for authoritative resolution, the matter was referred to the Larger Bench.

Conclusion: Pre-deposit of duty and penalty was dispensed with and recovery was stayed pending decision by the Larger Bench.

Final Conclusion: The order granted interim protection to the appellant and kept the dispute open for determination by the Larger Bench without adjudicating the appeal on merits.

Ratio Decidendi: Where the core issues in a tax dispute are already under reference to a Larger Bench and the tribunal records a prima facie case in favour of the appellant, waiver of pre-deposit and stay of recovery can be granted pending final resolution.

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