Cenvat credit on pipes for gas pipelines upheld as a strong prima facie case for stay and waiver of pre-deposit

Pipes used for laying gas pipelines were treated as eligible for Cenvat credit where the appellant received them under invoices naming it as consignee and used them in providing gas transportation service. The objection that the pipeline, rather than the pipes, was the relevant input was rejected. It was also noted that the department did not show double availment of credit or non-compliance with documentary requirements. Rule 3 was read as supporting credit on pipes as capital goods, and Rule 9 as allowing credit where invoices substantially contained the required particulars, supporting waiver of pre-deposit and stay against recovery.

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Issues: Whether the appellant had made out a prima facie case for waiver of pre-deposit and stay, in the context of denial of Cenvat credit on pipes used for laying gas pipelines.

Analysis: The appellant received the pipes under invoices showing it as consignee, and the materials were used for laying the pipeline through which gas transportation service was provided. The objection that the pipeline, and not the pipes, constituted the input was rejected. The reasoning also accepted that the department had not shown that the credit was taken twice or that the documentary requirements under the Cenvat Credit Rules were not met. Rule 3 was treated as supporting credit on pipes as capital goods, and Rule 9 as permitting credit where the invoice substantially contained the necessary particulars.

Conclusion: The appellant was held to have a strong prima facie case for Cenvat credit and for waiver of pre-deposit and stay against recovery.

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