Tribunal grants waiver for duty amount, citing compliance with Cenvat Credit Rules.

The Tribunal granted the appellant's request for waiver of pre-deposit of duty amounting to Rs. 1,26,87,564/-, along with interest and penalties. The dispute stemmed from the appellant's availing of Cenvat credit on common inputs for exempted and dutiable products without separate bookkeeping as required by Rule 6(3) of the Cenvat Credit Rules, 2004. Despite procedural lapses, the Tribunal recognized the appellant's prima facie case for waiver based on evidence of compliance with the reversal requirements under Rule 6(3), allowing the application and staying the recovery pending appeal disposal.

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Issues:
Waiver of pre-deposit of duty, Cenvat credit availed, Rule 6 of Cenvat Credit Rules, 2004, Separate books of account maintenance, Reversal of Cenvat credit, Input Service Distributor, Exempted and dutiable finished products, Applicability of Rule 6(3), Compliance with the law, Prima facie case for waiver, Recovery stay during appeal disposal.

Analysis:

The judgment revolves around two stay petitions seeking the waiver of pre-deposit of duty amounting to Rs. 1,26,87,564/- along with interest and penalties imposed on the appellant firm and its authorized signatory. The dispute arises from the appellant's availing of Cenvat credit on common inputs used in both exempted and dutiable finished products without maintaining separate books of account as required by Rule 6(3) of the Cenvat Credit Rules, 2004.

The appellant argues that they have already reversed a portion of the amount in compliance with Rule 6(3A) and presented a Chartered Accountant's certificate to support their claim. On the other hand, the Departmental representative contends that the reversal was done without prior intimation and includes incorrect calculations, incorporating services attributable to manufactured goods.

The appellant cites a Tribunal decision to support their position that reversing the amount attributable to inputs for exempted goods constitutes substantial compliance with Rule 6(3) post-amendment. After considering both sides' submissions, the Tribunal finds that the appellant indeed availed Cenvat credit through an Input Service Distributor and reversed the amount linked to exempted products as per Rule 6(3). Despite the lack of prior intimation to the authorities, the Tribunal acknowledges the appellant's prima facie case for waiver based on the evidence provided.

Consequently, the Tribunal allows the applications for the waiver of pre-deposit amounts and stays the recovery pending the appeal's disposal, emphasizing the appellant's compliance with the reversal requirements under Rule 6(3) despite procedural shortcomings.

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