2012 (7) TMI 845 - AT - Central Excise

Appellant granted waiver on pre-deposit for cenvat credit penalty, demonstrating legitimate electricity usage.

PHILIPS CARBON BLACK LTD. Versus COMMISSIONER OF C. EX., VADODARA

The Tribunal allowed the appellant's application for waiver of pre-deposit of duty and penalty on cenvat credit availed on capital goods. The appellant ... Denial of CENVAT Credit - Credit on Grid which has been installed in the factory premises, which receives electricity from Gujarat State Electricity Board and transmits the excess of electricity generated by them to the Gujarat State Electricity Board - Held that:- The certificate issued by the Executive Engineer, Dakshin Gujarat Vij Company Limited specifically states that the said Grid is used for receiving the electricity from the GETCO Grid and also injecting power into GETCO Grid. There being no dispute as to the fact that the appellant is using electricity received through such Grid for manufacturing of final products, we find that the appellant has made out a prima facie case for the waiver of pre-deposit of amounts involved. Application for waiver of pre-deposit of amounts involved is allowed and recovery thereof stayed till the disposal of appeal - Stay granted. Issues:- Waiver of pre-deposit of duty and penalty on cenvat credit availed by the appellant on capital goods.Analysis:The appellant filed a stay petition seeking the waiver of pre-deposit of duty amounting to Rs. 12,41,377/- along with an equal penalty. Both lower authorities confirmed the demand with interest and imposed a penalty, alleging improper availing of cenvat credit on capital goods in the factory premises. The appellant's representative argued that the credit was availed on a Grid installed in the factory premises, which received electricity from the Gujarat State Electricity Board for manufacturing final products. The Executive Engineer's certificate supported this claim. After hearing both sides and examining the records, the Tribunal found that the issue revolved around the cenvat credit on the capital goods, specifically the Grid in the factory premises. The certificate confirmed the Grid's usage for receiving and injecting power into the grid, which was then utilized by the appellant for manufacturing purposes. As there was no dispute regarding the usage of electricity for manufacturing final products, the Tribunal concluded that the appellant had established a prima facie case for the waiver of pre-deposit. Consequently, the application for the waiver of pre-deposit was allowed, and the recovery of the amounts involved was stayed pending the appeal's disposal. The judgment was dictated and pronounced in the Court by the judges Shri M.V. Ravindran and B.S.V. Murthy.This detailed analysis of the judgment highlights the key issues of the case, the arguments presented by both parties, the supporting evidence, and the Tribunal's decision based on the facts and legal provisions.