Cenvat credit denial and pre-deposit waiver turned on accepted duty payment and a strong prima facie case for interim relief.

Waiver of pre-deposit and stay of recovery were sought where Cenvat credit had been denied on the ground that cutting and slitting stainless steel coils did not amount to manufacture. The appellant relied on evidence that duty had been paid after reversal of credit and also through PLA, and on binding precedent that credit cannot be denied merely because the final activity is alleged not to be manufacture when duty on the final product is otherwise accepted. On that basis, a strong prima facie case for interim relief was established, supporting waiver of pre-deposit of duty, interest and penalty during pendency of the appeal.

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Issues: Whether the appellant was entitled to waiver of pre-deposit of duty, interest and penalty and stay of recovery during the pendency of the appeal.

Analysis: The demand was founded on denial of Cenvat credit on the premise that cutting and slitting of stainless steel coils did not amount to manufacture. The appellant showed that duty had been paid after reversal of credit and also through PLA, and relied on binding precedent holding that where duty on the final product is accepted, credit cannot be denied merely because the activity is said not to amount to manufacture. On that basis, the appellant established a strong prima facie case for interim relief.

Conclusion: The appellant was entitled to waiver of pre-deposit and stay of recovery.

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