Successful appeal against demand confirmation for reversed Cenvat credit on furnace procurement. Lack of evidence led to orders being set aside.

The appellant successfully appealed against the demand confirmation for reversing Cenvat credit related to a furnace procured from their sister unit. The court found insufficient evidence to prove non-usage of the furnace by the appellant, highlighting the lack of thorough investigation by the Revenue. As a result, the impugned orders were set aside, and the appellant was exempted from pre-deposit of duty and penalty amounting to Rs. 96,978/-, disposing of the stay petition and appeal.

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Issues: Request to dispense with pre-deposit of duty and penalty due to reversal of Cenvat credit for furnace procured from sister unit.

Analysis:
The judgment addresses the application seeking exemption from the pre-deposit of duty and penalty amounting to Rs. 96,978/-, confirmed against the appellant for reversing Cenvat credit related to a furnace procured from their sister unit. The sister unit initially purchased the furnace, availed credit, and later transferred it to the appellant in May 2007 by reversing the credit. Subsequently, an audit in February 2009 revealed the furnace lying in the appellant's factory as scrap, leading to proceedings against the appellant for demand confirmation. The appellant argued that the furnace was used for some time before becoming scrap and contested the absence of an installation certificate requirement for the furnace. The judgment notes the lack of evidence supporting the Revenue's claim solely based on the physical condition of the furnace observed during the audit visit after two years from receipt. It highlights the absence of recorded statements or thorough investigation by the Revenue, emphasizing the insufficiency of evidence to prove non-usage of the furnace by the appellant. Consequently, the impugned orders are set aside, and the appeal is allowed, disposing of the stay petition and appeal accordingly.

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