CENVAT credit on jetty-linked transfer equipment held to need further examination; partial waiver granted pending appeal.

CENVAT credit on ethylene unloading arms, pipes and hoses used to move imported raw material through a jetty and marine transfer facility to the factory was examined on the question whether those facilities formed an integral part of the factory and whether the goods qualified as capital goods or eligible inputs under the CENVAT Credit Rules, 2004. The Tribunal noted that the authorities cited did not conclusively support either side at the interim stage and found that a complete waiver was not justified because a strong prima facie case had not been established. Partial protection was nevertheless granted pending final disposal, subject to pre-deposit of dues and stay of recovery for the balance.

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Issues: Whether CENVAT credit on the ethylene unloading arm, pipes and hoses used for transporting imported raw material through the jetty and marine transfer facility to the factory was prima facie admissible, and whether the appellant was entitled to waiver of the balance demand and stay pending appeal.

Analysis: The dispute turned on whether the jetty and connected pipelines formed an integral part of the factory so as to bring the disputed goods within the scope of capital goods or eligible credit under the CENVAT Credit Rules, 2004. The claimed use of the jetty under port permission and the ownership of the pipelines were taken into account, but the Tribunal noted that the existing authorities cited on both sides did not conclusively resolve the issue in the appellant's favour at this stage. The Tribunal held that the appellant had not established a prima facie case strong enough for complete waiver, though the circumstances justified partial protection pending final disposal.

Conclusion: Partial waiver of the adjudged dues was granted, subject to a pre-deposit of Rs. 10,00,000, and recovery of the balance was stayed until disposal of the appeal.

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