Tribunal orders Rs. 10,00,000 pre-deposit for waiver of duty, interest & penalty The Tribunal directed the applicant to make a pre-deposit of Rs. 10,00,000/- within six weeks. Upon compliance, the balance amount of duty, interest, and ...
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Tribunal orders Rs. 10,00,000 pre-deposit for waiver of duty, interest & penalty
The Tribunal directed the applicant to make a pre-deposit of Rs. 10,00,000/- within six weeks. Upon compliance, the balance amount of duty, interest, and penalty would be waived, and recovery stayed pending the appeal's disposal. The compliance deadline was set for August 6, 2014.
Issues: 1. Application for waiver of pre-deposit of duty and Cenvat credit. 2. Dispute regarding short/excess payment of duty by Unit-II. 3. Eligibility of Unit-I to avail Cenvat credit. 4. Bar on demand by limitation. 5. Amount of pre-deposit directed by the Tribunal.
Analysis:
1. The applicant filed for the waiver of pre-deposit of duty amounting to Rs. 61,81,244/- for Unit-II and Cenvat credit of Rs. 13,42,860/- for Unit-I, along with interest and penalty. Both appeals were consolidated for disposal.
2. The Tribunal found discrepancies in the declared value by Unit-II compared to the actual cost of production of castings. This resulted in a shortfall of Central Excise duty of Rs. 61,81,244/- for specific periods and an excess payment of duty of Rs. 13,42,840/- by Unit-II, which was mistakenly availed as Cenvat credit by Unit-I.
3. The Counsel argued that the dispute pertained to the alleged short/excess payment of duty by Unit-II under CAS-4, leading to Unit-I availing the credit. The Tribunal acknowledged the revenue neutrality claim but emphasized the need for a detailed examination during the appeal hearing to determine the eligibility of Unit-I to retain the Cenvat credit.
4. The Revenue contended that Unit-I wrongly paid an excess duty amount, making them ineligible for the Cenvat credit. The applicant argued that the demand was time-barred, estimating a normal demand of around Rs. 14,000/-.
5. The Tribunal directed the applicant to make a pre-deposit of Rs. 10,00,000/- within six weeks. Upon compliance, the balance amount of duty, interest, and penalty would be waived, and recovery stayed pending the appeal's disposal. The compliance deadline was set for August 6, 2014.
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