Cenvat credit on coal duty and prima facie interim relief support an unconditional stay where supplier paid duty under valid notification.

Unconditional stay was granted where denial of Cenvat credit on coal duty was challenged, because both the exemption notification and the later 1% duty notification were in force during the relevant period. The coal supplier had chosen the later notification and paid duty accordingly, and the appellant had taken credit of that duty. The analysis also records that assessment at the input receiver's end could not be challenged. On these facts, the appellant was held to have a strong prima facie case for interim relief, and the stay petition was allowed unconditionally.

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Issues: Whether the appellant was entitled to unconditional stay against the confirmed duty demand arising from denial of Cenvat credit on coal duty, and whether the coal supplier could validly avail the excise notification that allowed payment of duty at 1%.

Analysis: During the relevant period, both the unconditional exemption notification and the later notification permitting the supplier to pay duty at 1% were in existence. The coal supplier had opted for the later notification and had paid duty accordingly, and the appellant had availed credit of that duty. The order also records that assessment at the input receiver's end cannot be challenged. On these facts, the appellant was found to have a strong prima facie case for interim relief.

Conclusion: The stay petition was allowed unconditionally in favour of the appellant.

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