Capital goods under Rule 57Q: stay on duty and penalty granted on prima facie case and balance of convenience.

Rule 57Q waiver and stay relief were examined in a dispute over whether cement, iron and steel, structural items and cables used in a plant qualified as capital goods. The Tribunal noted that the earlier interim order cited by the Department had not addressed whether the disputed items formed part of a plant covered by the rule, and it stated that the rule did not require the capital goods themselves to be excisable goods. On the material before it, the Tribunal found a prima facie case and balance of convenience in favour of the applicant, and recovery of duty and penalty was stayed pending appeal, subject to keeping Rs. 1.00 lakh unutilised in the RG 23A account.

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Issues: Whether the applicant was entitled to waiver of pre-deposit and stay of recovery in respect of duty and penalty, in a dispute turning on whether cement, iron and steel, structural items and cables used in the plant could be treated as capital goods under Rule 57Q.

Analysis: The Tribunal held that the earlier interim order relied on by the Department did not consider whether the disputed items formed part of a plant specifically covered by the rule. It further held that there was no requirement under Rule 57Q that the capital goods themselves must necessarily be excisable goods. On the material before it, the Tribunal found a prima facie case in favour of the applicant and accepted the offer to keep Rs. 1.00 lakh unutilised in the RG 23A account pending the appeal. The balance of convenience was held to be in favour of the applicant.

Conclusion: The duty and penalty were waived pending appeal and their recovery was stayed, subject to the applicant keeping Rs. 1.00 lakh unutilised in the RG 23A account.

Final Conclusion: Interim relief was granted to the applicant on the basis of a prima facie case and balance of convenience, and recovery of the disputed duty and penalty remained stayed during the appeal.

Ratio Decidendi: For waiver of pre-deposit, where the applicant shows a prima facie case and balance of convenience, and the capital goods rule does not require the specified plant items themselves to be excisable goods, stay of recovery may be granted.

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