Prima facie case for Cenvat credit dispute led to waiver of pre-deposit and interim relief.

A strong prima facie case justified waiver of pre-deposit of duty and penalty in an appeal concerning alleged contravention of the Cenvat Credit Rules. The applicants were found eligible to avail credit at the interim stage, and the alleged breach was treated as technical rather than substantive. The original authority had also dropped the demand after examining the facts, which supported interim relief. On that basis, pre-deposit was dispensed with until disposal of the appeal and the stay application was allowed.

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Issues: Whether the applicants made out a prima facie case for waiver of pre-deposit of duty and penalty in the appeal arising from alleged contravention of the Cenvat Credit Rules.

Analysis: The applicants were found, at the interim stage, to be eligible for availing credit and the alleged breach was treated as technical in nature. The original authority had also dropped the demand after examining the facts, which supported the applicants' request for interim relief. In these circumstances, a strong prima facie case was held to exist for dispensing with pre-deposit.

Conclusion: The requirement of pre-deposit of duty and penalty was waived till disposal of the appeal and the stay application was allowed.

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