Cenvat credit on motorcycle safety components upheld prima facie, securing waiver of pre-deposit and stay of recovery.

Sari guard and mirror assembly cleared with motorcycles were treated, prima facie, as accessories because motor vehicle safety requirements showed both items were essential safety components. On that basis, they fell within the meaning of inputs under Rule 2(k) of the Cenvat Credit Rules, 2004, and the appellant established a strong prima facie case for interim relief. Waiver of pre-deposit was therefore granted, and recovery of the confirmed credit demand, interest and penalty was stayed pending disposal of the appeal.

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Issues: Whether the appellant had made out a prima facie case for waiver of pre-deposit by showing that sari guard and mirror assembly cleared with motorcycles were accessories or inputs eligible for Cenvat credit.

Analysis: The safety requirements under the Motor Vehicles Rules showed that sari guard was an essential safety component for motorcycles, and mirror assembly was also treated as a safety component. On that basis, both items were regarded, prima facie, as accessories to motorcycles and therefore as inputs within the meaning of Rule 2(k) of the Cenvat Credit Rules, 2004. This was sufficient to establish a strong prima facie case for interim relief against recovery.

Conclusion: The appellant was entitled to waiver of pre-deposit, and recovery of the confirmed credit demand, interest, and penalty was stayed till disposal of the appeal.

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