Cenvat credit on accessories cleared with the final product supported prima facie waiver of pre-deposit and stay

Cenvat credit was treated as prima facie admissible on film rolls cleared together with the camera in a combined pack, because Rule 2(k) of the Cenvat Credit Rules, 2004 includes accessories of the final product cleared along with it. The camera was assessed under Section 4A of the Central Excise Act, 1944, and the lower authority had already recorded that the film rolls were accessories to the camera. On that basis, the assessee established a prima facie case for credit and obtained interim waiver of pre-deposit and stay of recovery.

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Issues: Whether Cenvat credit was admissible on film rolls cleared along with the camera pack as accessories of the final product, and whether a prima facie case existed for waiver of pre-deposit.

Analysis: The definition of input in Rule 2(k) of the Cenvat Credit Rules, 2004 includes accessories of the final products cleared along with the final product. The film rolls were cleared along with the camera in a combination pack, duty was discharged on the camera under Section 4A of the Central Excise Act, 1944, and the lower authority had recorded that the film rolls were accessories to the camera. On that footing, the appellant established a prima facie entitlement to the credit claim and to interim protection against recovery.

Conclusion: The appellant was entitled, at the interim stage, to waiver of pre-deposit and stay of recovery, and the credit issue was found in favour of the assessee prima facie.

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