Tribunal allows Cenvat credit on coal duty, ruling in favor of appellants.

The Tribunal ruled in favor of the appellants in the case, allowing Cenvat credit on duty paid for coal. The dispute arose from the disallowance of credit due to the coal supplier not being mandated to pay duty. The Tribunal interpreted the exemption notification as not mandatory for the supplier, thus permitting the credit. Emphasizing the distinction between duty paid and payable, the Tribunal supported the appellants' argument for credit. Additionally, the Tribunal waived the remaining pre-deposit amount and granted a stay on recovery, acknowledging the appellants' strong case.

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Issues: Whether the appellant had made out a strong prima facie case for waiver of the remaining pre-deposit and stay of recovery in view of the disputed denial of Cenvat credit on coal duty paid by the supplier.

Analysis: The exemption notification applicable to coal manufactured in a mine was found to be subject to a condition and therefore not shown to be compulsorily available to the supplier as a matter of law. On that basis, the foundation for denying Cenvat credit, namely that the supplier was mandatorily bound to avail the exemption and that the amount paid could not be treated as duty, was considered weak at the stay stage. The Tribunal also noted that the appellant had already deposited Rs. 10 lakhs and that the cited authorities supported the claim for credit treatment of duty paid on inputs.

Conclusion: The appellant was held entitled to waiver of the remaining pre-deposit and to stay of recovery pending disposal of the appeal.

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