Modvat credit for chlorine cylinders under Rule 57Q required factual examination, so complete waiver was refused and partial deposit ordered.

Eligibility of chlorine cylinders for capital goods Modvat credit under Rule 57Q required a detailed examination of their design and function in the manufacturing process, which could not be fully undertaken at the stay stage. The cited Commissioner's decision was not binding, and the Tribunal ruling relied on did not concern Rule 57Q. On that basis, complete waiver of pre-deposit was declined, but partial relief was granted through a conditional deposit, with the balance of duty and penalty stayed pending appeal.

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Issues: Whether pre-deposit of the disputed duty and penalty should be dispensed with pending appeal on the claim of capital goods Modvat credit under Rule 57Q.

Analysis: The eligibility of the chlorine cylinders for capital goods Modvat credit depended on a detailed examination of their design and their role in the manufacturing process. That exercise could not be undertaken at the stay stage. The cited Commissioner's decision was not binding, and the Tribunal decision relied on did not concern Rule 57Q. On that basis, only partial relief in the form of a conditional deposit was justified.

Conclusion: The application for complete waiver was not accepted, but the applicant was granted partial dispensation on condition of depositing Rs. 10,00,000 and the balance of duty and penalty was stayed.

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