Modvat credit on storage tanks as capital goods justified only as an arguable claim, with partial pre-deposit waiver granted.

Modvat credit on storage tanks claimed as capital goods was found arguable because the tanks were specially designed for storing hydrofluoric acid and were said to be necessary for manufacture of the final product. The tribunal noted that the issue required detailed examination at the final hearing, but no financial hardship was shown. Partial waiver of pre-deposit was therefore granted, and the balance duty was stayed subject to deposit of Rs. 60,000.

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Issues: Whether total waiver of pre-deposit of duty was justified in respect of Modvat credit claimed on storage tanks treated as capital goods.

Analysis: The claim was that the storage tanks were specially designed for storing hydrofluoric acid and were necessary components of the plant for manufacture of the final product. The matter was found to be arguable and requiring detailed examination at the stage of final hearing. No financial hardship was shown.

Outcome: Partial waiver of the pre-deposit was granted and the balance duty was stayed on deposit of Rs. 60,000.

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