Appeal Success: Waiver of Excise Duty & Penalty for M/s. Dalmia Chini Mills Ltd.

The case involved M/s. Dalmia Chini Mills Ltd. seeking waiver of pre-deposit and stay of recovery of Excise duty and penalty amounting to Rs. 3,23,830/- each. The appellant's challenge against the denial of Cenvat credit on commercial construction services used in the factory premises was successful. The judge found a strong prima facie case in favor of the appellant, noting the lack of evidence supporting the denial of credit. Consequently, the judge granted a waiver of pre-deposit and stayed the recovery of duty and penalty pending the appeal's disposal.

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Issues:
- Waiver of pre-deposit and stay of recovery of Excise duty and penalty
- Denial of Cenvat credit on commercial construction services used in the construction of factory premises

Waiver of pre-deposit and stay of recovery of Excise duty and penalty:
The case involved a stay application filed by M/s. Dalmia Chini Mills Ltd. seeking waiver of pre-deposit and stay of recovery of Excise duty amounting to Rs. 3,23,830/- along with an equal amount of penalty, confirmed by the Commissioner of Central Excise (Appeals). The appellant had availed Cenvat credit on service tax paid for commercial construction services used in constructing the factory premises. However, the credit was denied to them based on a show cause notice stating that input services for a commercial property were not covered under the definition of input services as per Rule 2(l) of Cenvat Credit Rules. Despite the denial by the original authority and the Commissioner (Appeals), the appellant challenged the order-in-appeal, seeking waiver of pre-deposit and stay of recovery of the confirmed dues.

Denial of Cenvat credit on commercial construction services used in the construction of factory premises:
During the proceedings, the Commissioner of Central Excise (Appeals) had denied the benefit of Cenvat credit to the appellant, citing the lack of evidence such as work contract agreements or invoices to support the contention that the construction services were used in the repair and renovation of the factory. The department's stand, as per the show cause notice, was that commercial construction services were utilized by the appellant in constructing the factory premises. However, the presiding judge found that the appellants had a strong prima facie case in their favor. Noting the absence of evidence supporting the denial of Cenvat credit and considering the appellant's strong case, the judge waived the pre-deposit and granted a stay against the recovery of duty and penalty until the appeal was disposed of.

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