Deemed Modvat credit supports waiver of pre-deposit and stay of recovery where prima facie entitlement is shown.

Waiver of pre-deposit and stay of recovery were granted where the appellants showed a strong prima facie case on deemed Modvat credit. The Tribunal noted that denial of credit was based on the supplier's omission to certify duty payment in the invoices and alleged non-compliance with Notification No. 58/97-C.E., but relied on a High Court ruling that a buyer from a manufacturer under the Compounded Levy Scheme could still claim deemed credit despite the missing declaration. On that basis, interim protection was afforded pending final adjudication of the appeal.

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Issues: Whether the appellants were entitled to waiver of pre-deposit and stay of recovery in respect of the demand relating to deemed Modvat credit and penalty.

Analysis: The credit had been denied below on the footing that the supplier had not certified payment of duty in the invoices and that the conditions of Notification No. 58/97-C.E. were not satisfied. The Tribunal noticed a High Court ruling that a buyer from a manufacturer under the Compounded Levy Scheme could claim deemed credit under the notification even if the invoice did not contain the supplier's declaration of duty discharge. On that basis, the appellants were found to have a strong prima facie case for interim relief.

Conclusion: Waiver of pre-deposit and stay of recovery were granted.

Final Conclusion: Interim protection was afforded to the appellants, and the appeal remained pending for final adjudication.

Ratio Decidendi: Where binding precedent shows a strong prima facie entitlement to deemed credit, pre-deposit can be waived and recovery stayed pending appeal.

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