ORDER
Archana Wadhwa, Member (J)
1. The prayer in the Application is for dispensing with the condition of pre-deposit of the duty amount of Rs. 2,55,000.00 (Rupees two lakh fifty-five thousand) confirmed against the applicants/appellants by denying them the Modvat credit of Duty paid on capital goods on the ground that the said capital goods have been obtained by them on lease and in terms of the provisions of Rule 57R(3), no Modvat credit is available to them. Penalty of Rs. 10,000.00 (Rupees ten thousand) has also been imposed.
2. Shri D.K. Saha, learned Consultant for the applicants/appellants fairly admits that in terms of the provisions of Rule 57R(3), if the capital goods are obtained by the manufacturer on lease or on hire purchase or by any other transaction other than direct purchase, no Credit of Duty paid on the capital goods is available to the assessee. However, he submits that the Credit was availed by the appellants in the year 1994, whereas the show cause notice has been issued in 1999 i.e. after expiry of the normal period of limitation of six months. However, on being queried, he fairly admits that the information regarding acquiring of capital goods on lease basis, was not disclosed to the Revenue, but submits that the extended period would not be invocable, inasmuch as they had filed the declaration, RT-12 returns were submitted and finalised. He also submits that the applicant/appellant company is a sick industry and is in a poor financial condition and thus prays for unconditional stay of the pre-deposit.
3. Shri T.K. Kar, learned SDR for the Revenue, on the other hand, submits that in view of the clear provisions of Rule 57R(3), the applicant/appellant company is not entitled to avail the Modvat credit. The fact that the capital goods were acquired on lease basis, was also not disclosed to the Revenue at any point of time. It was only in the year 1997 when an audit objection was raised, the applicants/appellants came forward with the real information. In these circumstances, the extended period has been rightly invoked by the Revenue. He, therefore, prays for rejection of the Stay Petition.
4. After hearing the submissions made by both sides, I find that the applicants/appellants do not have a prima facie case either on merits or on limitation. Admittedly, the capital goods have been acquired on lease basis and as such the applicant/appellant company is debarred from taking the Credit in respect of the same. Similarly, on the point of limitation, I observe that the applicants/appellants have admittedly not disclosed the fact of acquiring the capital goods on lease basis, to the Revenue at any point of time. In these circumstances, I am of the view that the applicants/appellants do not have a prima facie case in their favour so as to allow the Stay Petition unconditionally. However, keeping in view the financial condition of the applicants/appellants, I direct them to deposit an amount of Rs. 1.50 lakh (Rupees one lakh fifty thousand) within a period of six weeks from today. Subject to deposit of the above amount, balance amount of duty and the entire amount of penalty shall stand waived and its recovery stayed during the pendency of the appeal. Matter to come up for ascertaining compliance on 16-6-2003. Subject to ascertainment of the compliance, the appeal would be taken up for hearing on the said date.