Tribunal grants stay petition, waives pre-deposit on ineligible cenvat credit for fabrication.

The tribunal granted the appellant's stay petition, waiving the pre-deposit of duty, interest, and penalty on ineligible cenvat credit for items used in the fabrication of capital goods and structures within the factory premises. The tribunal found that the appellant had established a prima facie case for the waiver based on the limitation aspect, noting precedents supporting the eligibility of cenvat credit on such items during the relevant period. Consequently, the recovery of the amounts in question was stayed until the final disposal of the appeal.

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Issues:
Waiver of pre-deposit of duty, interest, and penalty on ineligible cenvat credit for items used in fabrication of capital goods and structures.

Analysis:
The judgment pertains to a stay petition seeking the waiver of pre-deposit of duty, interest, and penalty on cenvat credit deemed ineligible by the adjudicating authority. The authority concluded that the appellant was not entitled to credit on items like MS angles, beams, TMT bars, and channels used in the fabrication of capital goods and structures within the factory premises.

The tribunal, comprising Mr. M.V. Ravindran and Mr. H.K. Thakur, considered the arguments presented by both sides and examined the records. The appellant's counsel highlighted that the credit was availed on the items until April 2009, and a show cause notice was issued in March 2011 invoking the extended period. The counsel pointed out that until the decision in the case of Vandana Global by the Larger Bench of the Tribunal, there were precedents allowing credit on such items used for machinery fabrication and subsequent manufacturing of excisable goods.

Upon review, the tribunal found that the appellant had established a prima facie case for the waiver of pre-deposit based on the limitation aspect. It noted that during the relevant period from March 2006 to April 2009, there were decisions supporting the eligibility of cenvat credit on items like MS angles, beams, and channels when used for machinery fabrication. The tribunal emphasized that the Vandana Global decision was issued in 2010, and it was reasonable for the appellant to have a bona fide belief in availing the credit. Therefore, invoking the extended period for demanding the credit was deemed prima facie incorrect.

Consequently, the tribunal allowed the application for the waiver of pre-deposit based on the limitation aspect and stayed the recovery of the amounts in question until the appeal's final disposal. The order was dictated and pronounced in the court by Mr. M.V. Ravindran.

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