CESTAT AHMEDABAD: Additional Deposit Required for Appeal

The Appellate Tribunal CESTAT AHMEDABAD directed the appellant to deposit an additional amount of Rs. 5,00,000/- within eight weeks to further hear and dispose of the appeals. The waiver of pre-deposit of the remaining balance amounts was granted subject to compliance, and recovery was stayed until the disposal of appeals. The Tribunal emphasized the importance of considering the limitation issue at the time of final appeal disposal.

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Issues: Stay petition for waiver of pre-deposit of duty and penalty due to Cenvat credit availed without registration as Input Service Distributor.

In this judgment by the Appellate Tribunal CESTAT AHMEDABAD, the appellant filed a stay petition seeking waiver of pre-deposit of duty amounting to Rs. 2,36,44,289/- along with an equal penalty. The amounts were confirmed by the adjudicating authority as ineligible Cenvat credit availed by the appellant without being registered as an Input Service Distributor. The appellant argued that a portion of the demand was related to availing credit on inputs cleared to 100%EOUs under CT-3 certificates, citing a previous tribunal decision in favor of a different assessee. However, the departmental representative contended that the appellant could not have a bonafide impression of the law, especially considering the timeline of events. The Tribunal noted that the matter of Cenvat credit reversal on inputs cleared to EOUs was against the appellant based on a previous Larger Bench decision, but also acknowledged the issue of limitation as the period involved spanned from June 2003 to September 2011, with show cause notices issued within the limitation period. The Tribunal directed the appellant to deposit an additional amount of Rs. 5,00,000/- within eight weeks to further hear and dispose of the appeals, with the waiver of pre-deposit of the remaining balance amounts granted subject to compliance and stayed recovery until the disposal of appeals. The judgment emphasized the importance of considering the limitation issue at the time of final appeal disposal.

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