Modvat credit on furnace inputs was treated as prima facie admissible, justifying waiver of pre-deposit and stay.

A prima facie case for Modvat credit on LDO, furnace oil and mobile oil was found where the materials were stated to be directly used in the furnace for manufacturing iron and steel castings. Rule 57A, as applicable from 1-3-1994, was treated as having wide scope and covering goods used in relation to manufacture. On that basis, the assessee was held entitled to dispensation of pre-deposit and stay.

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Issues: Whether pre-deposit of the demanded amount should be dispensed with on the assessee making out a prima facie case for Modvat credit on LDO, furnace oil and mobile oil under Rule 57A.

Analysis: The materials in question were stated to be directly used in the furnace for manufacture of iron and steel castings. The Tribunal noted that Rule 57A, as applicable from 1-3-1994, had a wide amplitude and covered goods used in relation to manufacture. On that basis, it found a prima facie case that the inputs claimed by the assessee could fall within the rule.

Conclusion: The assessee was entitled to dispensation of pre-deposit and stay.

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