Tribunal Rules on Pre-Deposit Waiver for Cenvat Credit Dispute

The Tribunal addressed stay petitions seeking waiver of pre-deposit of duty, interest, and penalty on ineligible cenvat credit for plant and machinery fabrication. The issue centered on the eligibility of cenvat credit for specific inputs, referencing Vandana Global judgment. The Tribunal directed a deposit of Rs.4.25 lakhs, considering the limitation period and appellant's previous deposit. Compliance was required before further orders, with balance pre-deposit waiver granted pending appeal outcome.

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Issues:
Stay petitions for waiver of pre-deposit of duty amount, interest, and penalty on ineligible cenvat credit availed on inputs for fabrication of plant and machinery.

Analysis:
The appellant filed stay petitions seeking the waiver of pre-deposit of duty amount, interest, and penalty totaling Rs.1,87,93,726/-, confirmed by the adjudicating authority as ineligible cenvat credit availed on inputs like TMT bars, plates, beams, angles, channels for the fabrication of plant and machinery for a new plant. The appellant argued that the demand was time-barred, citing a previous case where a similar plea of limitation was considered. The Departmental Representative (D.R.) reiterated the findings of lower authorities and referred to the judgment of Vandana Global Ltd., stating it would directly apply in this case.

Upon reviewing the submissions and records, the Tribunal found the issue to be contentious, as a Larger Bench held in the case of Vandana Global that the assessee is ineligible to avail cenvat credit on inputs used for manufacturing/fabrication of structural items and capital goods. Notably, the judgment in Vandana Global was under appeal before the High Court of Jharkhand. The Tribunal directed the appellant to deposit Rs.4.25 lakhs, considering the amount involved within limitation to be approximately Rs.7,00,000/-, and the appellant had already deposited Rs.3.05 lakhs towards the ineligible cenvat credit. The compliance of pre-deposit was to be reported before the Deputy Registrar, and subject to compliance, the waiver of pre-deposit of the balance amounts was allowed, with recovery stayed until the disposal of appeals.

In conclusion, the Tribunal addressed the stay petitions seeking the waiver of pre-deposit of duty amount, interest, and penalty on ineligible cenvat credit availed on inputs for the fabrication of plant and machinery. The decision was based on the contentious issue regarding the eligibility of cenvat credit on specific inputs, referencing the judgment in Vandana Global and the pending appeal before the High Court. The Tribunal directed a specific deposit amount, considering the appellant's previous deposit and the amount involved within the limitation period, ensuring compliance before further orders were passed.

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