Deemed Modvat credit and pre-deposit waiver require strict satisfaction of the specified goods description and proven financial hardship.

Deemed Modvat credit under the 12-5-1986 order was confined to sheets below 5 mm thickness under sub-heading 72.12, so strips, skelp and coils were not eligible because the record did not show that they were sheets and the tariff and description requirements had to be met together. Waiver or suspension of pre-deposit was also refused because no financial hardship was pleaded or supported by evidence, leaving only a partial deposit and conditional stay of recovery pending the appeal on merits.

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Issues: (i) Whether deemed Modvat credit at Rs. 500 per MT was admissible on strips, skelp and coils under the Government order dated 12-5-1986; (ii) Whether the applicants had made out a case for waiver or suspension of the pre-deposit on the ground of financial hardship.

Issue (i): Whether deemed Modvat credit at Rs. 500 per MT was admissible on strips, skelp and coils under the Government order dated 12-5-1986.

Analysis: The credit scheme was confined to sheets of less than 5 mm thickness falling under sub-heading 72.12. The products in dispute were described as strips, skelp and coils, and the record did not show that they were sheets. Even if some products could fall under sub-heading 72.12, the governing condition required the goods to satisfy both the description as sheets and the tariff classification.

Conclusion: The higher deemed Modvat credit was not admissible on strips, skelp and coils.

Issue (ii): Whether the applicants had made out a case for waiver or suspension of the pre-deposit on the ground of financial hardship.

Analysis: No financial hardship was pleaded or supported by evidence. In the absence of such material, no basis was shown for dispensing with the deposit ordered by the Tribunal.

Conclusion: No waiver of pre-deposit was granted.

Final Conclusion: The applicants were directed to make a partial deposit, and stay of recovery operated only upon compliance, leaving the appeal pending on merits.

Ratio Decidendi: A concession of deemed Modvat credit must be confined strictly to the goods and conditions specified in the governing order, and waiver of pre-deposit requires substantiated financial hardship.

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