Modvat credit on steel structures and platforms limited by tariff-heading eligibility, leading to partial pre-deposit relief only.

Steel structures, platforms and similar items were treated as prima facie outside the scope of parts of capital goods for Modvat credit purposes, because Rule 57Q of the Central Excise Rules, 1944 limited eligibility to goods falling within the specified tariff heading. As no complete prima facie case for waiver was made out, full waiver of pre-deposit was refused. The assessee was granted only partial relief on the basis of pleaded financial hardship, with a directed pre-deposit and waiver of the balance duty and entire penalty pending appeal.

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Issues: Whether waiver of pre-deposit of the disputed duty and penalty should be granted in full in respect of Modvat credit claimed on steel structures, platforms and other parts alleged to be components of capital goods.

Analysis: The order held that, prima facie, steel structures and platforms could not be treated as parts of capital goods. It was further found that, under Rule 57Q of the Central Excise Rules, 1944, only goods falling within the specified tariff heading could qualify as capital goods, and the admissibility of credit on the goods in question was an arguable issue. Since no prima facie case for complete waiver was made out, but financial hardship was pleaded, partial relief from pre-deposit was considered appropriate.

Conclusion: Full waiver of pre-deposit was declined. The assessee was directed to deposit Rs. 10,00,000 within eight weeks, and the balance duty and entire penalty were waived and recovery stayed pending the appeal.

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