Modvat credit on glass bottles upheld at stay stage where bottle cost formed part of aerated water cost.

Modvat credit on glass bottles used for aerated water was treated as admissible where the bottles' cost formed part of the aerated water cost, including rotation charges. Applying the same ratio on stay, the Tribunal held that the assessee had a strong prima facie case and dispensed with pre-deposit of duty and penalty. Recovery was stayed during pendency of the appeal.

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Issues: Whether pre-deposit of duty and penalty should be waived and recovery stayed pending appeal in a dispute concerning Modvat credit on glass bottles used for aerated water.

Analysis: The Tribunal noted that on identical facts it had already held that Modvat credit on glass bottles would be admissible where the cost of the bottles was included in the cost of aerated water. The cost statement placed on record showed inclusion of rotation charges in the cost, and the matter was to be governed by the same ratio at the stage of stay.

Outcome: Pre-deposit of duty and penalty was dispensed with and recovery remained stayed during the pendency of the appeal.

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