Modvat credit on DG set components supported prima facie waiver of pre-deposit and stay of recovery.

Waiver of pre-deposit and stay of recovery were accepted for disputed Modvat credit, penalty, duty and interest where the contract covered supply of a DG set with common auxiliaries. The record indicated that the engine, alternator and other auxiliaries were to be supplied for installation at the factory, and the cited Modvat provisions were treated as supporting credit on capital goods and their components used for setting up the DG set. Earlier decisions on similar facts were regarded as prima facie applicable, leading to acceptance of the waiver request and stay of recovery.

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Issues: Whether the applicant was entitled to waiver of pre-deposit and stay of recovery in respect of the disputed Modvat credit, penalty, duty and interest.

Analysis: The contract was for supply of one DG set with common auxiliaries, and the record showed that engine, alternator and other auxiliaries were to be supplied for installation at the factory. The cited Modvat provisions supported credit on capital goods and their components used for setting up the DG set, and the Tribunal treated the earlier decisions on similar facts as prima facie applicable.

Conclusion: The request for pre-deposit waiver was accepted and recovery was stayed.

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