Tribunal grants waiver of pre-deposit on cenvat credit & penalty

The Appellate Tribunal CESTAT KOLKATA granted the applicant's request for waiver of pre-deposit of cenvat credit and penalty under Section 11AC of the Central Excise Act, 1944. The Tribunal accepted the applicant's claim that the total liability post-registration as 'Input Service Distributor' was around Rs.53.00 lakhs. The applicant was directed to deposit Rs.5.00 lakhs within six weeks, with the balance amount waived, and recovery stayed during the appeal process. The Revenue was given liberty to verify the claimed payment of Rs.19.00 lakhs and approach the Tribunal in case of any discrepancies.

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Issues: Application for waiver of pre-deposit of cenvat credit and penalty under Section 11AC of the Central Excise Act, 1944.

In this judgment by the Appellate Tribunal CESTAT KOLKATA, the applicant sought a waiver of pre-deposit of cenvat credit amounting to Rs.6.98 Crores and an equal penalty imposed under Section 11AC of the Central Excise Act, 1944 read with Rule 15 (2) of Cenvat Credit Rules, 2004. The applicant had availed cenvat credit based on invoices issued by Depots registered under Input Service Distributor after a specific date. The demand notice was issued on the grounds that the invoices from the Depots were invalid due to registration issues. The applicant admitted that a portion of the amount was indeed prior to the registration of the Depot as an input service distributor. The Tribunal noted that the Commissioner failed to address the applicant's claim of computation error in the demand. After considering the submissions and records, the Tribunal accepted the applicant's claim that the total liability post-registration as 'Input Service Distributor' was around Rs.53.00 lakhs. The Tribunal directed the applicant to deposit Rs.5.00 lakhs within six weeks, with the balance amount waived and recovery stayed during the appeal process. The Revenue was given liberty to verify the claimed payment of Rs.19.00 lakhs and approach the Tribunal in case of any discrepancies, thereby disposing of the stay petition accordingly.

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