Cenvat credit dispute on input use supported full waiver of pre-deposit and stay of recovery pending appeal.

Denial of Cenvat credit on inputs allegedly not used in manufacture did not justify insisting on pre-deposit where duty had already been paid on clearance of the goods from the factory. On that basis, a prima facie case was found for waiver of pre-deposit of duty, education cess, SHEC and penalty, and full waiver of pre-deposit was granted with recovery stayed until disposal of the appeal.

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Issues: Whether the applicant had made out a prima facie case for waiver of pre-deposit of duty, education cess, SHEC and penalty demanded under the Cenvat Credit Rules and the Central Excise Act.

Analysis: The demand arose from denial of Cenvat credit on inputs allegedly not used in the manufacture of the final product. The order records that duty had been paid on clearance of the goods from the factory, and that denial of credit in such circumstances was not justified for the purpose of pre-deposit.

Outcome: The applicant was found to have a prima facie case, the pre-deposit was waived in full, and recovery was stayed till disposal of the appeal.

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