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of <h1>Court waives pre-deposit, stays recovery of dues pending appeal citing strong prima facie case</h1> <h3>M/s NEW ERA ADHESIVE INDUSTRIES Versus COMMISSIONER OF CENTRAL EXCISE, NASHIK</h3> M/s NEW ERA ADHESIVE INDUSTRIES Versus COMMISSIONER OF CENTRAL EXCISE, NASHIK - 2014 (300) E.L.T. 106 (Tri. - Mumbai) Issues:- Whether the applicant is required to reverse the CENVAT credit in respect of inputs lying in stock on 31.03.2008.- Whether recovery of mechanism under Rule 14 is applicable when the manufacturer does not pay the amount required under Rule 11 of CCR 2004.Analysis:1. The appeal involved a crucial issue regarding the reversal of CENVAT credit by the applicant for inputs in stock as of 31.03.2008. The department required the reversal of CENVAT credit on inputs in finished goods and work-in-progress. A show-cause notice was issued and confirmed by lower authorities, leading to the appeal.2. The applicant's advocate argued that the issue of CENVAT credit reversal for those availing small scale exemption had been settled by the Tribunal and the High Court. He cited a specific case where the High Court ruled that SSI-exempted assesses are not obligated to reverse CENVAT credit. Based on this precedent, the advocate requested a waiver of the pre-deposit amount for the appeal.3. The Revenue's representative contended that the recovery mechanism under Rule 14 was not applicable when the manufacturer failed to pay the required amount under Rule 11 of CCR 2004. The lower authority upheld the demand, emphasizing the non-applicability of Rule 14 in such cases.4. Upon review, the judge noted that the show-cause notice was issued under Rule 14 of the CENVAT Credit Rules 2004 and confirmed by the Original Authority. However, the Commissioner (Appeals) found Rule 14 not applicable in this instance. Additionally, referencing a High Court judgment, it was highlighted that assesses opting for SSI exemption were not mandated to reverse CENVAT credit. Considering these aspects, the judge found a strong prima facie case in favor of the applicant.5. Consequently, the judge waived the pre-deposit and granted a stay against the recovery of dues until the appeal's final disposal. The decision was made in light of the applicant's favorable circumstances and the legal precedents supporting the non-reversal of CENVAT credit for SSI-exempted assesses.6. In conclusion, the stay petition was allowed, providing relief to the applicant pending the appeal's resolution.
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