Modvat credit on packing-related capital goods was treated as arguable, but partial pre-deposit was still required for stay of recovery.

Modvat credit on capital goods used for labelling and printing was claimed on the basis that packing forms part of manufacture. The Tribunal treated that contention as arguable because the appellant said the equipment was used in relation to manufacture, but it noted that the original denial rested on the view that the goods were used only after manufacture and had no role in production. Finding no financial hardship, the Tribunal declined complete waiver of pre-deposit and ordered a partial deposit as a condition for stay of recovery of the balance, with non-compliance exposing the appeal to dismissal.

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Outcome: The application for waiver of pre-deposit was partly granted by directing deposit of Rs. 50,000 within four weeks and staying recovery of the balance demand pending the appeal.

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