2013 (8) TMI 201 - AT - Central Excise

Tribunal Waives Pre-deposit for CENVAT Credit: Narmada Canal Water Use

The Tribunal allowed the application for waiver of pre-deposit of ineligible CENVAT Credit, interest, and penalty, staying recovery pending appeal ... Waiver of Pre-deposit - Availment of CENVAT Credit of Service Tax paid on the construction services which are used for laying the pipelines for drawing the water from Narmada canal to their factory premises – Held that:- Appellant’s consistent stand before both the lower authorities that the water which is drawn from Narmada canal is used for the manufacturing activity which is manufacturing of chemicals - This issue is not disputed by the lower authorities - The consistent stand of the appellant before both the lower authorities has not been disputed by the adjudicating authority as also the fact that the appellant had given the manufacturing process chart to the lower authorities, which is in detail, that the water which is drawn from Narmada canal is used for manufacturing activity – Application for waiver of pre-deposit allowed – Decided in favor of Assessee. Issues:Waiver of pre-deposit of ineligible CENVAT Credit, interest, and penalty confirmed by lower authorities.Analysis:The appellant filed a Stay Petition seeking waiver of pre-deposit of Rs.2,95,418/-, confirmed as ineligible CENVAT Credit, interest, and penalty. The lower authorities found the appellant availed CENVAT Credit for construction services used in laying pipelines to draw water from Narmada canal to their factory premises. The appellant contended that the water from the canal was used for manufacturing chemicals, a stand consistent before both lower authorities. The first appellate authority rejected the appeal due to lack of documentary evidence proving water usage for manufacturing. However, the appellant provided a detailed manufacturing process chart supporting their claim. The adjudicating authority did not dispute the appellant's consistent stand or the manufacturing process details presented.The Tribunal noted the appellant's consistent stand and detailed manufacturing process chart indicating water usage for manufacturing activity. Considering this, the Tribunal found the appellant made a prima facie case for waiver of pre-deposit. Consequently, the application for waiver of pre-deposit of the amounts involved was allowed, and recovery stayed pending appeal disposal. The Tribunal's decision was based on the appellant's evidence supporting the utilization of water from Narmada canal for manufacturing chemicals, establishing a prima facie case for waiver of pre-deposit.