MODVAT pre-deposit waiver granted partly after prima facie case, approved classification list, and financial hardship were considered.

A stay application on disputed MODVAT credit was assessed on the basis of prima facie case, the effect of the declaration and approved classification list, and the appellants' financial position. The requirement of a MODVAT declaration was weighed against the fact that the classification list referred to MODVAT on the relevant items and had been approved. Financial hardship and the limited amount involved also supported relief. On that basis, complete waiver was declined, but partial waiver of pre-deposit and stay of recovery was granted, subject to deposit of Rs. 27,000 within the stipulated time.

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Issues: Whether the appellants were entitled to waiver of pre-deposit and stay of recovery of the disputed MODVAT credit, and if so, to what extent.

Analysis: The application for stay was examined on the basis of the prima facie case, the effect of the declaration and approved classification list, and the financial position of the appellants. The view that a declaration under the relevant MODVAT procedure was mandatory was weighed against the fact that the classification list referred to MODVAT on the relevant items and had been approved. The record was also considered for financial hardship and the limited amount involved. On that assessment, the majority view accepted that complete waiver was not warranted but that partial relief was justified.

Conclusion: The appellants were held entitled to partial waiver of pre-deposit and stay of recovery, subject to deposit of Rs. 27,000 within the stipulated time.

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