Pre-deposit waiver for Corex Gas by-product dispute, as a strong prima facie case justified stay of recovery

In a dispute over demand under Rule 6(3)(b) relating to Corex Gas generated as a by-product in manufacture, the Tribunal treated the gas as a technological necessity arising from the production process and considered prior decisions supporting non-recovery of 8% of its value. On the material before it, the Tribunal found that availment of Modvat credit appeared correct and that the appellants had established a strong prima facie case. That prima facie assessment justified waiver of pre-deposit and protection against recovery pending final hearing.

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Issues: Whether the appellants were entitled to unconditional waiver of pre-deposit and stay of recovery in a dispute concerning demand under Rule 6(3)(b) on Corex Gas arising as a by-product during manufacture.

Analysis: The appellants showed that Corex Gas emerged as a technological necessity in the manufacturing process and relied on prior decisions supporting the view that a by-product arising in such circumstances would not justify recovery of 8% of its value. On the material before it, the Tribunal found that the availment of Modvat credit appeared correct and that the appellants had made out a strong prima facie case. That prima facie assessment was sufficient to justify dispensing with pre-deposit and protecting the appellants from recovery pending final hearing.

Conclusion: The appellants were entitled to unconditional waiver of pre-deposit and stay of recovery.

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