Prima facie CENVAT credit on accessories to capital goods justified waiver of pre-deposit and stay of recovery.

On a prima facie assessment, MS plates, angles and channels used to manufacture power cable distribution boards for poly machines were treated as accessories to capital goods, supporting eligibility for CENVAT credit at the interim stage. The contrary claim that the items were used in immovable electrical trenches was not accepted for purposes of stay. Waiver of pre-deposit was therefore granted and recovery of duty, interest and penalty was stayed until disposal of the appeal, strictly on a prima facie basis.

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Issues: Whether the applicant was entitled to waiver of pre-deposit and stay of recovery in respect of the duty, interest and penalty demand, and whether the impugned goods were prima facie eligible for CENVAT credit as accessories to capital goods.

Analysis: The order recorded that the applicant used MS plates, angles and channels for manufacturing power cable distribution boards used in poly machines, and that these boards functioned as accessories for the machines. On a prima facie assessment, the impugned items were treated as accessories to capital goods, and the contrary contention that they were used in immovable electrical trenches was not accepted for the purpose of interim relief.

Outcome: Waiver of pre-deposit was granted and recovery of the dues was stayed until disposal of the appeal, on a prima facie basis only.

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