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of <h1>Tribunal rules in favor of appellant, allows Cenvat credit, waives pre-deposit in duty exemption area</h1> The tribunal allowed the appeal, ruling in favor of the appellant. It found that disallowance of Cenvat credit was not warranted as it was not initially ... Notification No. 50/2003-CE dated 10.6.2003 - Disallownce of Cenvat Credit - appellant was under the bonafide belief that Cenvat credit was available to it. But due to unusability of the above machines, at the time of removal thereof the appellant reversed the Cenvat credit entries relating to excise duty paid in respect of said machines in its record - Revenue contended that appellant is not entitled to Cenvat credit and duty is also payable - Revenue could not come out with evidence to show that Cenvat credit recorded in the accounts was utilized at any time before that was reversed - Disallowance is usually made if it was earlier allowed under law - waiving requirement of pre-deposit - appeal is allowed Issues involved:1. Disallowance of Cenvat credit and levy of excise duty on machines found not usable in a duty exemption area.Analysis:The case involved a dispute regarding the disallowance of Cenvat credit and the levy of excise duty on machines that were found not usable in a duty exemption area. The appellant had purchased two machines, one on 8.3.2008 and the other on 6.5.2008, but due to their unusability, they were removed from the factory on 28.1.2009 and 19.8.2008 respectively. The appellant, operating in a duty exemption area, initially believed that Cenvat credit was available but later reversed the credit entries related to excise duty paid on the machines upon their removal.The authorities below had held that there should be a disallowance of credit and a levy of excise duty amounting to Rs. 4,32,600. However, the appellant argued that since it was in a duty exemption area and had not utilized the Cenvat credit, no duty liability should arise. The appellant contended that it was not liable to pay excise duty on the machines as it did not manufacture them and had not availed the Cenvat credit.After hearing both sides and examining the record, the tribunal found that there was no dispute regarding the arrival and removal of the machines covered by the invoices. The tribunal noted that the appellant had reversed the Cenvat credit on its own accord and that there was no evidence to show that the credit was utilized before reversal. The tribunal concluded that disallowance of Cenvat credit was not warranted since it was not earlier allowed under the law. Additionally, since the appellant was not the manufacturer of the machines and had not enjoyed the Cenvat credit, no recovery of excise duty was permissible by law.As a result, the tribunal allowed the appeal, waiving the requirement of pre-deposit, as the appellant succeeded in demonstrating that the levy of excise duty was not justified in a duty exemption area. The appeal was disposed of with the consent of both parties, and the decision was pronounced in the open court.
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