Waiver of pre-deposit granted where separate records and credit reversal supported a strong prima facie case

Separate records for inputs used in exempted and dutiable goods, together with reversal of Modvat/Cenvat credit attributable to exempted goods, supported interim relief. The Tribunal treated the assessee's maintenance of records and the credit reversal as strong prima facie material on merits, and on that basis granted waiver of pre-deposit.

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Issues: Whether waiver of pre-deposit was justified where the assessee claimed to maintain separate records for inputs used in exempted and dutiable goods and had reversed credit attributable to inputs used in exempted goods.

Analysis: The Tribunal noted that the adjudicating authority's own observations indicated that separate records were maintained for several inputs, and that the assessee had reversed the Modvat/Cenvat credit relatable to inputs used in exempted goods. In view of the facts and circumstances, and the reversal already made, the appellants were found to have a strong case on merits for purposes of interim relief.

Conclusion: Waiver of pre-deposit was granted in favour of the appellants.

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