CENVAT credit and Rule 6 applied to captive clinkers, supporting waiver of pre-deposit and stay of recovery.

CENVAT credit entitlement and Rule 6 of the CENVAT Credit Rules, 2001 and 2004 were considered in the context of captively consumed clinkers used to manufacture cement supplied through international competitive bidding. The assessee's supply under international competitive bidding was treated as an admitted fact, and it was noted that CENVAT credit could be available in relation to the dutiable cement despite the exemption structure. The availability of corresponding credit, even if duty were payable on captively consumed clinkers, supported interim protection. On that basis, a prima facie case for waiver of pre-deposit was made out and recovery was stayed pending disposal of the appeal.

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Issues: Whether the appellant was entitled to waiver of pre-deposit and stay of recovery in respect of duty, interest and penalty demanded on captively consumed clinkers used in the manufacture of cement supplied in international competitive bidding.

Analysis: The supply of cement in international competitive bidding was treated as an admitted position. The provisions of Rule 6 of the CENVAT Credit Rules, 2001 and 2004 were considered applicable, and it was found that the assessee could avail CENVAT credit in relation to the dutiable cement notwithstanding the exemption structure. It was also noted that if duty were required to be paid on captively consumed clinkers, corresponding credit would be available for manufacture of cement, which supported the plea for interim relief.

Conclusion: The appellant made out a prima facie case for waiver of pre-deposit, and the application was allowed with recovery stayed till disposal of the appeal.

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