Cenvat credit on electricity and iron ore fine clearances: prima facie stay granted, with substantial time-bar objections accepted.

Prima facie waiver of pre-deposit and stay was considered in a demand relating to Cenvat credit on inputs and input services linked to electricity sold and iron ore fine cleared during the period. Electricity was treated as prima facie non-excisable, and the applicability of Rule 6(2) of the Cenvat Credit Rules, 2004 to such clearances was doubted. Iron ore fine was also viewed as prima facie not clearly exigible on the facts. The Tribunal nonetheless noted that credit attributable to such clearances could remain recoverable in light of the Supreme Court authority cited by the revenue, and the plea of substantial time bar was also prima facie accepted.

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Issues: Whether the applicants had made out a prima facie case for waiver of pre-deposit and stay in a demand arising from credit taken on inputs and input services attributable to electricity sold and iron ore fine cleared during the relevant period.

Analysis: Electricity was found, prima facie, not to be excisable goods, and the applicability of Rule 6(2) of the Cenvat Credit Rules, 2004 to such clearances was doubted. Iron ore fine was also treated, prima facie, as not clearly exigible on the facts before the Tribunal. At the same time, it was observed that credit attributable to such clearances could still be recoverable in the light of the Supreme Court decision relied upon by the revenue. The plea of substantial time bar was also considered prima facie acceptable.

Conclusion: The applicants were directed to deposit Rs. 5 lakhs, and on compliance, recovery of the remaining amount of service tax and penalty was waived and stayed till disposal of the appeal.

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