Modvat credit transfer on factory shifting was treated as prima facie permissible, leading to waiver of pre-deposit and stay of recovery.

Transfer of Modvat credit on shifting of a factory was read as permissible under Rule 57S(4) and Rule 57N(2) where the site of the factory changes, and the provisions were treated as covering separate categories rather than requiring both sale or amalgamation and relocation together. On that prima facie construction, the departmental objection to transferability was not accepted for interim purposes, and pre-deposit of the duty demand was waived with recovery stayed.

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Issues: Whether pre-deposit of the duty demand should be waived and recovery stayed in relation to transfer of Modvat credit on shifting of the factory under Rule 57S(4) and Rule 57N(2).

Analysis: The cited provisions were read as permitting transfer of credit where there is a change in the site of a factory or a change in ownership, and the wording was treated as supporting separate categories of cases rather than restricting transfer only to situations involving both sale or amalgamation and relocation. On that prima facie construction, the departmental objection was not accepted for interim purposes.

Conclusion: Pre-deposit of the duty demand was waived and recovery of the demand was stayed.

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