Modvat credit on pre-notification capital goods could not be denied prima facie, so pre-deposit was waived and recovery stayed.

Modvat credit on capital goods received in the factory before 23 July 1996 could not, on a prima facie view, be denied by applying Notification No. 14/96-C.E. (N.T.) retrospectively to those receipts. That apparent infirmity in the denial justified interim protection, so waiver of pre-deposit was granted and recovery was stayed.

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Issues: Whether Modvat credit on capital goods received in the factory before 23-7-1996 could be denied by applying Notification No. 14/96-C.E. (N.T.) dated 23-7-96, and whether waiver of pre-deposit and stay of recovery should be granted.

Analysis: The appeal involved denial of Modvat credit on capital goods received before the effective date of the notification. On a prima facie appraisal, applying Notification No. 14/96-C.E. (N.T.) dated 23-7-96 to such receipts appeared incorrect. That prima facie view was sufficient to justify interim protection against recovery.

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

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