Ambuja Cement Ltd. vs Commissioner of Central Excise and Service Tax

Whether the CESTAT was justified in directing the appellant to make pre-deposit of Rs. 1.30 crores on the prima facie opinion that the credit availed on inputs used in construction of supporting structure which is embedded to the earth is not available to the assessee, is the question raised in this appeal. The CESTAT has ordered pre-deposit by relying upon the Larger Bench decision of the CESTAT in the case of 2010 (253) ELT 440 . It appears that appeals filed against the Larger Bench decision of the CESTAT in the case of Vandana Global Limited (supra) and other cases arc pending before different High Courts.

It may be noted that prior to the amendment of Explanation 2 to Rule 2(k) of the CENVAT Credit Rules, 2004, this Court in the case of Commissioner of Central Excise v. Ispat Industries Limited (Central Excise Appeal No. 187 of 2006 decided on 19th July, 2007) has held that credit of duty paid on angels, channel and plates, etc. which are used in the construction of supporting structure would be available. Though the Larger Bench in the case of Vandana Properties has held that the amendment to Explanation (2) to Rule 2(k) of the Cenvat Credit Rules, 2004 by notification dated 7th July, 2009 is retrospective in nature, the issue is debatable. In any event, dispute in the present case relates to the period prior to 7th July, 2009 and, therefore, in our opinion, it is a fit case to hear the matter on merits without insisting on any pre-deposit.

Accordingly, the impugned order of CESTAT dated 22nd February, 2012 is quashed and set aside and the CESTAT is directed to hear the appeal on merits without insisting on any pre-deposit. The appeal is accordingly disposed off with no order as to costs.