Modvat compliance and common inputs: absence of separate storage did not defeat prima facie entitlement to unconditional stay.

Modvat compliance was treated as sufficient where the appellant had not taken credit on 75% of the common inputs and the inputs used in exempted goods were only about 10 to 12%. The absence of separate storage facilities and day-to-day inventory for liquid common inputs was not treated as defeating prima facie compliance on the facts recorded. On that basis, the appellant was found to have established a strong prima facie case and was held entitled to unconditional stay.

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Issues: Whether the appellant was entitled to unconditional stay by showing prima facie compliance with the rule governing clearance of exempted and dutiable goods, notwithstanding the absence of separate storage and day-to-day inventory of common inputs.

Analysis: The order recorded that the appellant had not availed credit to the extent of 75% in respect of common inputs, while the input used in exempted goods was only about 10 to 12%. It was held that non-availment of credit on the relevant inputs amounted to sufficient compliance with the Modvat framework. The absence of separate storage facilities for liquid inputs was found not to defeat such compliance in the facts of the case.

Conclusion: The appellant established a strong prima facie case and was entitled to unconditional stay.

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