2012 (9) TMI 877 - AT - Central Excise

Appellant granted stay on disputed dues incl. CENVAT credit denial on capital goods

The appellant sought waiver and stay for adjudged dues, including CENVAT credit denial on capital goods, duty on inputs, and penalty. The court found in ... Stay of demand - prima facie case - exemption regime under Notification No. 30/2004-C.E. proviso regarding CENVAT credit - availability of CENVAT credit on capital goods - duty on inputs cleared as such - penalty stayDenial of CENVAT credit on capital goods - exemption regime under Notification No. 30/2004-C.E. proviso regarding CENVAT credit - prima facie case - Stay granted in respect of the demand for denial of CENVAT credit on capital goods - HELD THAT: - The Tribunal found on the record that the appellant had switched to the exemption regime on 9-1-2006 and cleared final products without payment of duty thereafter. The proviso to Notification No. 30/2004-C.E. operated to exclude the exemption where credit of duty on inputs had been taken under the CENVAT Credit Rules, 2002. It was not in dispute that the appellant had not availed CENVAT credit on inputs and the Notification did not preclude availment of CENVAT credit on capital goods. On these facts the Tribunal recorded a prima facie case against the demand of denial of CENVAT credit on capital goods and proceeded to grant the stay application as to that demand. [Paras 2]Stay allowed in respect of the demand for denial of CENVAT credit on capital goods.Duty on inputs cleared as such - prima facie case - stay of demand - Stay granted in respect of the demand of duty on inputs cleared as such - HELD THAT: - After hearing both sides the Tribunal recorded that there was a prima facie case against the demand of duty on inputs cleared as such and, having so found, allowed the stay application in respect of that demand. [Paras 3]Stay allowed in respect of the demand of duty on inputs cleared as such.Penalty stay - stay of demand - Stay granted in respect of the penalty imposed - HELD THAT: - The application sought waiver and stay of the penalty and, without separate contested reasoning on the penalty, the Tribunal allowed the stay application generally and thus stayed the penalty as part of the order granting interim relief. [Paras 4]Stay allowed in respect of the penalty.Final Conclusion: The Tribunal allowed the stay application: prima facie cases were recorded against the demands for denial of CENVAT credit on capital goods and for duty on inputs cleared as such, and the penalty was stayed; interim relief granted accordingly. Issues:1. Waiver and stay sought for adjudged dues on CENVAT credit denied on capital goods, duty demanded on inputs, and penalty.Analysis:The appellant filed an application seeking waiver and stay concerning the adjudged dues, including CENVAT credit denial on capital goods, duty demanded on inputs, and a penalty. The demand for CENVAT credit denial on capital goods was based on a notification and corrigendum. The appellant transitioned to an exemption regime on a specific date and cleared final products without paying duty thereafter. The exemption had a condition that it did not apply to goods for which duty credit on inputs was taken under CENVAT Credit Rules 2002. Since the appellant did not avail CENVAT credit on inputs and the notification did not prohibit availing credit on capital goods, a strong case was established against the demand of Rs. 2,65,203.Upon reviewing the submissions from both sides, the judge found a prima facie case against the demand of Rs. 68,132 for duty on inputs cleared as such. Consequently, the stay application was allowed, providing relief to the appellant regarding the disputed amounts. The judgment was pronounced and dictated in open court, concluding the matter.