ORDER
S.S. Kang, Vice-President
1. Heard both sides.
2. Applicants filed this application for waiver of pre-deposit of duty of Rs. 2,08,48,009/-. The demand was confirmed on the ground that the applicants had wrongly utilized the credit taken in respect of Additional Excise Duty (AED) paid on Rubberized Tyre Cord Fabric (RTCF).
3. The contention of the applicants is that there was a dispute regarding classification of RTCF and as per the decision of the Tribunal, they are liable to pay AED in respects of RTCF. The applicants also filed an appeal against the decision of the Tribunal before the Hon’ble Supreme Court.
4. In the month of January, 2004 the applicants had availed the AED as per the decision of the Tribunal and had taken the credit of the duty paid and utilized the same in respect of Basic Excise Duly (BED) in view of the provisions of Rule 3(6) of CENVAT Credit Rules, 2002. As per the explanation to this Rule, the credit of AED, leviable under Section 3 of the Additional Duties of Excise (GSI) Act, 1957, can be utilized towards payment of duty of Excise leviable under the First Schedule or the Second Schedule of the Central Excise Tariff Act, 1985. The contention of the applicants is that the Board has issued a Circular dated 6-3-2003 to this effect. The contention is also that the applicants have paid duty and have taken CENVAT Credit. In the appeal filed before the Hon’ble Supreme Court, the submission was made that duty had been paid and credit had already been taken. Therefore, they are not pressing the same. The appeal was dismissed as such. The contention is that the Revenue had not raised any objection regarding taking of credit. The contention is that Rule was amended by the Finance Act, 2004 w.e.f. 1-3-2004 and explanation was added to the effect that the credit of AED, leviable under Section 3 of the Additional Duties of Excise (GSI) Act paid on or after first day of April, 2000, may be utilized towards payment of duty of Excise leviable under the Excise Act. The contention of the applicants is that this explanation will not affect the case of the applicants as the credit was taken in the month of January, 2004 and utilized towards payment of duty of excise in the same month.
5. The contention of the Revenue is that no doubt that doubt that duty was paid in 2004, but the duty was paid in respect of the period 1997. Therefore, they cannot take advantage of this situation and in view of the explanation to the Finance Act, 2004, the applicants are not entitled to utilize the same towards payment of excise duty.
6. We find the admitted facts are that the AED was paid in the month of Jan. 2004 and utilized in the same month. Explanation to the Finance Act, 2004 is to the effect that the credit of AED paid on or after first day of April can be utilized towards payment of duty of excise. The applicants are challenging the liability of AED and the appeal was pending before the Hon’ble Supreme Court and the appeal was withdrawn by making a contention that credit has been taken and this submission was not objected by the Revenue. In these circumstances, the applicants have a strong prima facie case for waiver of pre-deposit of duty. The whole of the duty amount is waived and the stay petition is allowed and the recovery of the same is stayed during the pendency of the appeal. In view of the facts that the amount in dispute is over rupees two crore, the registry is directed to list this appeal in a week starting from 3-10-2005.
(Dictated and pronounced in open Court)