Modvat credit cannot be denied at the interim stage for procedural invoice or registration lapses when duty-paid inputs are prima facie established.

Modvat credit was treated as a substantive entitlement at the stay stage, and procedural objections about dealer registration and invoice particulars were held insufficient to justify denial where the inputs were duty-paid, duly declared, and no prima facie irregular availment was shown. On that basis, waiver of pre-deposit was granted and recovery stayed pending final hearing, with the merits left open for fuller examination.

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Issues: Whether the assessee was entitled to waiver of pre-deposit and stay of recovery in respect of the demand relating to Modvat credit, where the dispute concerned registration of dealers and details in invoices.

Analysis: The inputs were found to be duty-paid and duly declared, and there was no dispute on that factual foundation. The objections raised by the department related to registration formalities and invoice particulars, which were treated as procedural in nature. At the stay stage, Modvat credit was viewed as a substantive entitlement that should not be denied merely for procedural lapses, leaving the merits to be examined at final hearing.

Conclusion: The waiver of pre-deposit was granted and recovery was stayed during the pendency of the appeals.

Final Conclusion: The interim relief was allowed on a prima facie assessment that the dispute was essentially procedural and did not justify immediate recovery.

Ratio Decidendi: Substantive Modvat credit entitlement should not be denied at the interim stage merely because of procedural irregularities where duty-paid inputs have been declared and no irregular availment is shown prima facie.

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