Pre-deposit waiver in Cenvat credit dispute granted where exemption threshold under Notification No. 6/2005-S.T. showed a prima facie case.

Pre-deposit relief was considered in a dispute over alleged wrongful availment and utilisation of Cenvat credit, where demand, interest and penalties were proposed under the Cenvat Credit Rules, 2004 and the Finance Act, 1994. The appellant argued that Notification No. 6/2005-S.T. applied because the aggregate value of taxable services did not exceed the prescribed threshold in the relevant financial year, and on that basis claimed a strong prima facie case against recovery. On that footing, pre-deposit of tax, interest and penalty was waived and recovery was stayed pending disposal of the appeal.

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Issues: Whether pre-deposit of the demand, interest and penalties was liable to be waived in a case involving alleged wrongful availment and utilisation of Cenvat credit, and whether the appellant had made out a prima facie case based on exemption under Notification No. 6/2005-S.T.

Analysis: The application concerned demand raised under Rule 14 of the Cenvat Credit Rules, 2004 read with Section 73(1) of the Finance Act, 1994, along with interest and penalties under Sections 76 and 77 of the Finance Act, 1994. The appellant relied on exemption under Notification No. 6/2005-S.T. dated 01.03.2005 on the ground that the aggregate value of taxable services did not exceed the specified threshold during the relevant financial year. On that basis, the appellant asserted that a strong prima facie case existed for relief from pre-deposit.

Outcome: Pre-deposit of tax, interest and penalty was waived and recovery was stayed pending disposal of the appeal.

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