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Tribunal grants stay, waives pre-deposit for job worker denied cenvat credit. The Tribunal granted the appellant's stay application and waived the pre-deposit of interest and penalty. The appellant, a job worker, supplied spare ...
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The Tribunal granted the appellant's stay application and waived the pre-deposit of interest and penalty. The appellant, a job worker, supplied spare parts to a company on MRP basis but in loose condition along with printed packing material. The Department denied cenvat credit for packing material, leading to duty demand, interest, and penalty. The Tribunal found merit in the appellant's argument that the use of inputs for manufacturing packing material justified cenvat credit, allowing the waiver and stay application. The appeal was scheduled for further proceedings.
Issues Involved: The issue involves an application u/s 35F of the Act seeking waiver of duty demand, interest, and penalty based on the claim of cenvat credit for packing material supplied along with spare parts.
Summary: The appellant, a job worker of Maruti Suzuki Ltd., supplied spare parts to Maruti Suzuki Ltd. on MRP basis, but dispatched them in loose condition along with cartons/boxes printed with spare part details and MRP. The Department contended that since the goods were sent in packed condition, cenvat credit for packing material was not admissible. This led to a duty demand, interest, and penalty being imposed, which was upheld by the Commissioner (Appeals).
The appellant argued that since the spare parts were supplied along with printed packing material, implying the use of inputs for manufacturing the packing material, cenvat credit should not be denied solely based on physical packing. The Tribunal, after considering the contentions and facts of the case, found merit in the appellant's plea. A prima facie case for waiver of the condition of pre-deposit was established, leading to the allowance of the stay application and waiver of pre-deposit of interest and penalty.
The appeal was directed to be listed for further proceedings.
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