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2012 (3) TMI 362 - CESTAT NEW DELHIWaiver of pre deposit - Benefit of exemption Notification No. 56/2002-C.E. - Manufacture of pesticides - Held that:- Notification No. 56/2002-C.E. provides exemption to the extent as mentioned in the notification by way of requiring the assessee to first pay the duty through PLA, if any payable, after exhausting the Cenvat credit available at the end of the month and it is the duty paid through PLA which is available as refund subject to the cap of duty on the value addition specified for the product in the notification which for the goods of Chpater 38 is 34%. It is also not the Department’s allegation that the quantum of exemption availed is more than the duty payable on the specified value addition i.e. 34%. Thus even if the department’s allegation that the appellant have inflated the production figures is accepted, the fact remains that the refund they have received in respect of the inflated production is of the duty which they had actually paid. It is also not the case where the goods cleared by the appellant to a downstream manufacturer have been used by him as input and on the basis of the invoices issued by the appellant, the downstream manufacturer has availed full Cenvat credit in respect of the exempted goods under Rule 12 of the Cenvat Credit Rules, 2004. Thus, so far as duty demand of Rs. 1,44,78,352 is concerned, we are of the prima facie view that the appellant have not benefited in any manner. Just because the inputs for the pesticides/insecticides are sub-standard, the Cenvat credit in respect of the same cannot be denied sofar as the same are duty paid, and have been received in the factory. Moreover, a manufacturer availing exemption under Notification No. 56/2002-C.E. will not gain anything by availing ineligible Cenvat credit and thus increasing the Cenvat credit available to him, as the duty exemption available to him depends upon the duty paid through PLA after exhausting the Cenvat credit at the end of the month and thus higher Cenvat credit means less quantum of exemption. - requirement of pre-deposit of duty demand, Cenvat credit demand, interest and penalty is waived for hearing for the appeal and recovery thereof is stayed till the disposal of the appeal - Stay granted.
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