CENVAT credit on special additional duty supported prima facie interim relief, with pre-deposit waived and recovery stayed.

CENVAT credit on special additional duty paid by a 100% EOU under Rule 3(7) of the CENVAT Credit Rules, 2004 was disputed on the basis that Notification No. 22/2009 dated 07.09.2009 made credit of the 4% special additional duty under Section 3(5) of the Customs Tariff Act, 1975 admissible only from that date. The applicant relied on Tribunal precedent supporting credit for the earlier period as well, and the Tribunal accepted that a prima facie case existed for interim relief. Waiver of pre-deposit of duty, interest and penalty was therefore granted and recovery was stayed during pendency of the appeal.

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Issues: Whether the applicant was entitled to waiver of pre-deposit of duty, interest and penalty and stay of recovery pending appeal.

Analysis: The applicant had availed CENVAT credit on special additional duty paid by a 100% EOU under Rule 3(7) of the CENVAT Credit Rules, 2004. The Revenue relied on Notification No. 22/2009 dated 07.09.2009 to contend that credit of 4% special additional duty under Section 3(5) of the Customs Tariff Act, 1975 was admissible only from that date, while the applicant relied on Tribunal precedent allowing such credit for the earlier period as well. On that basis, the Tribunal found that a prima facie case existed for grant of interim relief.

Conclusion: Waiver of pre-deposit was granted and recovery was stayed during pendency of the appeal.

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