Waiver granted for CENVAT credit pre-deposit, halting recovery during appeal.

The judge granted the applicant's request for a waiver of pre-deposit of CENVAT credit amounting to Rs.2,45,146/- along with interest and penalties. Relying on precedents and Tribunal decisions, the judge found that the applicant had established a prima facie case for the waiver, allowing the stay application and halting the recovery of tax, interest, and penalties during the appeal process.

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Issues: Application for waiver of pre-deposit of CENVAT credit

Analysis:
The applicant, engaged in the manufacture of bulk drugs and undertaking job work, filed an application for waiver of pre-deposit of CENVAT credit amounting to Rs.2,45,146/- along with interest and penalties. The adjudicating authority had denied the credit on the basis that the applicant availed credit on GTA service for job work materials during the period April 2006 to October 2007.

The advocate for the applicant referred to the Larger Bench decision in the case of Sterlite Industries (I) Ltd. Vs Commissioner and various Tribunal decisions in their favor. He argued that the disputed period falls before 1.4.2008 and hence, they should be eligible for the credit. On the other hand, the AR representing the respondent reiterated the findings of the Commissioner (Appeals) stating that the applicant, being a job worker, is not entitled to avail credit on GTA service for outward transport.

The presiding judge observed that several Tribunal decisions have allowed service utilized in the manufacture of goods on a job work basis to be eligible for CENVAT credit, citing the Larger Bench decision in the case of Sterlite Industries (I) Ltd. The judge noted specific cases like CCE & ST Raigad Vs Vipras Castings Ltd., Amalgamations Repco Ltd. Vs CCE Chennai, and Polycab Industries Vs CCE Daman as examples where such credit was permitted. Based on this analysis, the judge found that the applicant had established a prima facie case for the waiver of pre-deposit of the entire tax amount, interest, and penalties. Consequently, the pre-deposit was waived, and the recovery of tax, interest, and penalties was stayed during the pendency of the appeal, with the stay application being allowed. The decision was dictated and pronounced in open court by the judge.

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