Modvat credit in job-work supplies supported waiver of predeposit and stay of recovery pending appeal.

Modvat credit on inputs used in job-work for a principal manufacturer under Notification No. 214/86-CE was treated as giving the assessee a prima facie case for interim relief. Relying on the Larger Bench ruling in Sterlite Industries and the Madras High Court decision in Hwashin Automotive India Pvt. Ltd., the Tribunal held that predeposit was not warranted at this stage. The duty, interest, and penalty confirmed in the impugned order were therefore kept in abeyance, and recovery was stayed pending disposal of the appeal.

---

---

Issues: Whether the assessee was entitled to waiver of predeposit and stay of recovery pending appeal.

Analysis: The assessee claimed modvat credit on inputs used in job work undertaken for a principal manufacturer under Notification No. 214/86-CE. Relying on the Larger Bench decision in Sterlite Industries and the decision of the Madras High Court in Hwashin Automotive India Pvt. Ltd., the Tribunal found that the assessee had made out a prima facie case for relief against the demand, interest, and penalty confirmed in the impugned order.

Conclusion: Predeposit of duty, interest, and penalty was waived and recovery was stayed during the pendency of the appeal.

---