Pre-deposit relief in central excise matter granted where Modvat credit claim and revenue protection were both considered.

Pre-deposit under Section 35F of the Central Excise Act was considered in the context of a claimed Modvat credit under Rule 57B for high speed diesel oil used to generate electricity within the factory. The dispute was treated as turning mainly on the legal entitlement to such credit, with limited factual controversy, and the revenue's interest was balanced against the petitioner's liability position for the post-amendment period. On that basis, the pre-deposit condition was modified and the petitioner was directed to deposit Rs. 5 lakhs, with waiver of the remaining deposit.

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Issues: Whether the condition of pre-deposit under Section 35F of the Central Excise Act, 1944 should be modified in view of the petitioner's claim for Modvat credit under Rule 57B of the Central Excise Rules.

Analysis: The petition involved only the question of pre-deposit pending the first appeal. The dispute turned on a legal issue regarding entitlement to Modvat credit on high speed diesel oil used for generation of electricity within the factory, with no serious factual controversy. The Court considered that the demand related to a substantial sum, but also noted that the petitioner did not dispute liability for the post-amendment period and that the interest of revenue could be protected by requiring a limited deposit.

Conclusion: The pre-deposit requirement was reduced and the petitioner was directed to deposit Rs. 5 lakhs, with waiver of the balance deposit.

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