Deemed credit and pre-deposit relief: recovery of excise duty and penalty stayed pending appeal.

Recovery of confirmed central excise duty and penalty was stayed pending appeal because the applicants showed a strong prima facie case for deemed credit. The Tribunal accepted that the supplier had discharged duty on the raw material and that the applicants' entitlement to credit under the relevant notification was supported by the material placed and the cited High Court decision. On that basis, the balance of convenience favoured protection against coercive recovery until the appeal was decided.

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Issues: Whether recovery of the confirmed central excise duty and penalty should be stayed during the pendency of the appeal in view of the applicant's claim of eligibility to deemed credit.

Analysis: The applicants sought waiver of pre-deposit contending that the supplier had discharged the duty liability and that they were entitled to avail credit under the relevant notification. The Tribunal noted that the supplier had discharged the duty on the raw material and that, on the material placed before it, the applicants had made out a strong prima facie case supported by the cited High Court decision. In such circumstances, the balance of convenience justified protection against coercive recovery pending disposal of the appeal.

Conclusion: Recovery of the duty and penalty was stayed during the pendency of the appeal.

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