Modvat credit on HSD oil and pre-deposit relief: statutory bar led to refusal of complete waiver.

Modvat credit on HSD oil was treated as inadmissible under Section 112 of the Finance Act, 2000 notwithstanding the Central Excise Rules, and the Tribunal considered that position at the stage of pre-deposit under Section 35F of the Central Excise Act, 1944. It also noted that interim protection against coercive steps did not, by itself, bar a direction for pre-deposit. On a prima facie view, the applicants had not shown a case for complete waiver of deposit, so partial pre-deposit was ordered with waiver of the balance and interim stay on recovery for the remainder during the appeals.

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Issues: Whether the appellants were entitled to waiver of pre-deposit of the duty demands in view of their claim to Modvat credit on HSD oil and the statutory bar under Section 112 of the Finance Act, 2000.

Analysis: The Tribunal noted that the demand arose from credit taken on HSD oil during the relevant period and that the Revenue relied on Section 112 of the Finance Act, 2000, which declared such credit not admissible notwithstanding the Central Excise Rules. It also considered the contention that the High Court's interim protection against coercive steps did not bar a pre-deposit direction under Section 35F of the Central Excise Act, 1944. On a prima facie view, the Tribunal accepted the Revenue's submission and held that the applicants had not established a case for complete waiver of pre-deposit.

Conclusion: Complete waiver of pre-deposit was refused and the applicants were directed to make partial deposits, with waiver of the balance and interim stay on recovery for the remaining amount during pendency of the appeals.

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