Pre-deposit waiver on written-off inputs: partial deposit ordered as prima facie credit admissibility was doubted.

Full waiver of pre-deposit was declined where CENVAT credit related to inputs written off in the accounts, because on a prima facie view such credit did not appear admissible when the inputs were not used in or in relation to manufacture of excisable goods. The limitation plea and the alleged valuation discrepancy were kept open for examination at the appeal stage. Reliance on the statutory circulars supported only a partial pre-deposit. The applicant was therefore directed to deposit 25% of the duty within the stipulated time, after which the balance dues were waived and recovery stayed pending appeal.

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Issues: Whether full waiver of pre-deposit of duty, interest and penalty was warranted in the facts of the case involving written-off inputs.

Analysis: The disputed credit related to inputs taken into account as written off in the accounts, and on a prima facie view such credit did not appear admissible where the inputs were not used in or in relation to manufacture of excisable goods. The contention regarding limitation and the alleged discrepancy in valuation was left for examination at the stage of the appeal. In the circumstances, the statutory circulars relied on by the Revenue supported a direction for partial pre-deposit rather than complete waiver.

Conclusion: Full waiver was declined. The applicant was directed to deposit 25% of the duty within the stipulated time, and on such deposit the balance dues were waived and recovery stayed during pendency of the appeal.

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