Cenvat credit cannot be denied when duty was actually levied and collected, supporting waiver of pre-deposit and stay of recovery.

Cenvat credit could not be denied at the pre-deposit stage where duty had been actually levied and collected on the goods, and the Revenue did not dispute payment of duty. On that basis, the Tribunal found a strong prima facie case in favour of the applicant-company and waived pre-deposit of duty and penalties. Recovery was stayed and kept in abeyance pending disposal of the appeals.

---

---

Issues: Whether pre-deposit of duty and penalties should be waived and recovery stayed pending appeal.

Analysis: The credit was denied on the ground that the goods were allegedly not excisable. The Tribunal noted that the Revenue did not dispute that duty had in fact been paid on the goods, and therefore there was a strong prima facie case that Cenvat credit could not be denied merely on that ground. Reliance was placed on the principle that credit is not to be denied where duty has been levied and collected on the goods.

Conclusion: Pre-deposit of duty and penalties was waived and recovery was stayed pending disposal of the appeals.

Final Conclusion: Interim relief was granted to the applicant-company and the connected recovery was kept in abeyance during the pendency of the appeals.

Ratio Decidendi: Where duty has been actually levied and collected on goods, Cenvat credit cannot be denied at the pre-deposit stage if a strong prima facie case is shown.

---