2013 (8) TMI 389 - AT - Central Excise

Tribunal grants reconsideration on stay petition, directs appellant to deposit Rs. One crore within ten weeks.

The Tribunal allowed the appellant's misc. application for reconsideration of the stay petition following a remand by the High Court. The Tribunal ... Waiver of pre-deposit – Stay application - Issue involved is availability of Cenvat credit in respect of various iron and steel items used as supporting structures in the appellants' factor. The issue finally stand decided against the appellant by the Larger Bench of Tribunal in the case of Vandana Global Ltd. vs. CCE [2010 (4) TMI 133 - CESTAT, NEW DELHI (LB)] – Further, the appellants advocate agreed that the issue stand decided against them - Only contention raised that there was no malafide or mis-statement or suppression with intent to evade payment of duty on the part of the applicant and as such, the benefit of limitation should be extended to them – Held that:- The demand of around Rs.One crore fall within the normal period of limitation, they were directed to deposit the said amount within the period of 10 weeks (period suggested by learned Advocate). As regards, the financial condition, appellants have not placed any document/evidence on record reflecting upon their poor financial condition - Two letters addressed to the Bank exchequer, throws no light on their actual financial condition - On the other hand, the report of jurisdictional Additional Commissioner (Rev) is very clear indicating progress in business of the appellant inasmuch as the production is admittedly higher than the previous corresponding period and payment of duty is also on the higher side. Issues:1. Reconsideration of stay petition in light of remand by High Court2. Availability of Cenvat credit for iron and steel items3. Financial hardship claim by the appellantIssue 1: Reconsideration of stay petition in light of remand by High CourtThe appellant filed a misc. application for reconsideration of the stay petition following a remand by the High Court. The Tribunal noted that the issue involved the availability of Cenvat credit for iron and steel items used as supporting structures, which was decided against the appellant by the Larger Bench. The appellant's advocate acknowledged this decision during the stay order. The Tribunal accepted the appellant's plea of no malafide intent due to favorable decisions before the Larger Bench's ruling. The High Court remanded the matter for reconsideration based on the case's merits and the appellant's financial condition.Issue 2: Availability of Cenvat credit for iron and steel itemsThe Tribunal found that the appellant had not proven financial hardship, as they failed to provide profit and loss accounts or balance sheets. The appellant only submitted letters from banks showing substantial credit limits and outstanding balances. The Revenue contested the appellant's claim of financial hardship, citing increased business activities and duty payments. The Tribunal noted the lack of detailed financial information from the appellant and the Revenue's evidence of improved business conditions.Issue 3: Financial hardship claim by the appellantThe appellant argued financial hardship before the High Court, emphasizing that the demand was within the limitation period except for one month. The Revenue asserted that the demand fell within the period allowed by the Central Excise Act, justifying the deposit requirement to protect its interests. The Tribunal reviewed the Andhra Pradesh High Court decision reducing a deposit amount in a similar case but found no prima facie case in favor of the appellant. Considering the legal issue against the appellant and the lack of financial difficulty in depositing the amount, the Tribunal directed the appellant to deposit Rs. One crore within ten weeks, waiving the balance amount of duty and penalty during the appeal's pendency.In conclusion, the Tribunal allowed the misc. application, disposing of the stay petition accordingly and setting a compliance date for the deposit.