CENVAT credit reversal supports waiver of further pre-deposit and stay of recovery pending appeal.

Where the applicant showed prima facie reversal of the entire CENVAT credit, the Tribunal treated the confirmed credit as effectively deposited. On that footing, it held that insisting on any further pre-deposit for hearing the appeal was unnecessary, and the remaining adjudged dues were protected by stay. The operative principle is that when the adjudged credit has been prima facie reversed or fully deposited, further pre-deposit may be waived and recovery stayed during pendency of the appeal.

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Issues: Whether pre-deposit of the adjudged credit and penalty ought to be waived and recovery stayed during the pendency of the appeal after reversal of the entire CENVAT credit.

Analysis: The Applicant produced material showing reversal of the entire amount of CENVAT credit. On a prima facie assessment of that evidence, the Tribunal accepted that the confirmed credit stood deposited. In that situation, requiring further pre-deposit was unnecessary for hearing the appeal, and the balance dues adjudged were fit to be protected by stay.

Conclusion: Pre-deposit of the balance dues was waived and recovery was stayed during the pendency of the appeal.

Ratio Decidendi: Where the adjudged credit has been prima facie reversed or deposited in full, waiver of further pre-deposit and stay of recovery may be granted pending appeal.

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