Pre-deposit waiver in Cenvat credit dispute denied for duty amount; interest and penalty relief granted pending appeal.

Complete waiver of pre-deposit was declined where Cenvat credit had been taken on invoices indicating duty payment, but the supplier had not actually paid duty when the credit was availed and paid it only later after a demand notice. The Tribunal found the cited precedent inapplicable because it arose under the erstwhile Central Excise Rules, 1944 and was not factually comparable. It also noted common directors between supplier and applicant and the absence of demonstrated financial hardship. Pre-deposit of the duty amount was directed, while pre-deposit of interest and penalty was waived during the appeal.

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Issues: Whether the applicant was entitled to complete waiver of pre-deposit where Cenvat credit had been taken on invoices showing duty payment, but the duty had in fact not been paid at the time of availing credit and was paid only later.

Analysis: The applicant availed and utilized credit in 2004 on the strength of invoices issued by the supplier, although the supplier had not paid duty at the time of clearance. Duty was paid only in 2007 after a demand notice. The Tribunal held that the facts did not justify reliance on the earlier decision cited by the applicant, since that case arose under the erstwhile Central Excise Rules, 1944 and was not on parallel facts. It was also noted that the supplier and the applicant had common directors, and no financial hardship was shown.

Conclusion: Complete waiver was declined. The applicant was directed to deposit the duty amount, while pre-deposit of interest and penalty was waived during the pendency of the appeal.

Final Conclusion: The application succeeded only to the limited extent of waiver of pre-deposit of interest and penalty, but failed as to the duty amount.

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