CENVAT credit on HR plates for storage tanks supported waiver and stay despite contrary tribunal precedent.

CENVAT credit on HR plates used to construct storage tanks for petroleum products was treated as prima facie admissible, because the appellant relied on High Court rulings holding that inputs used in manufacturing storage tanks can qualify as capital goods under Rule 2(a) of the CENVAT Credit Rules, 2004. The contrary Larger Bench view in Vandana Global Ltd. was noticed, but the High Court decisions were treated as prevailing. On that basis, a prima facie case was found for waiver and stay, and the adjudged dues were stayed.

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Issues: Whether waiver and stay should be granted in respect of the demand of CENVAT credit and the corresponding penalty on HR plates used in the construction of storage tanks for petroleum products.

Analysis: The appellant claimed that the HR plates were used for constructing storage tanks employed in storing final products, and relied on High Court decisions holding that CENVAT credit is admissible on inputs used in the manufacture of storage tanks which fall within the definition of capital goods under Rule 2(a) of the CENVAT Credit Rules, 2004. The contrary view of the Tribunal's Larger Bench in Vandana Global Ltd. was noticed, but the High Court rulings were treated as prevailing.

Conclusion: A prima facie case was found for grant of waiver and stay, and the adjudged dues were stayed.

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