Modvat credit on capital goods: prima facie waiver granted for refractories and related disputed imports, subject to partial deposit.

Prima facie entitlement to Modvat credit on capital goods was accepted for refractories, as they were specifically covered as capital goods under Rule 57Q. The objection that the Bill of Entry stood in the name of the registered office was treated as untenable at this stage, and the challenge based on civil structures was not regarded as a strong ground to refuse relief. The claim relating to goods used in quarrying limestone was considered arguable, with the distinction between Rule 57A and Rule 57Q treated as material. Partial waiver of pre-deposit was granted subject to deposit of Rs. 8 lakhs, and recovery of the balance was stayed.

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Issues: Whether waiver of pre-deposit could be granted in respect of disputed Modvat credit relating to capital goods used in quarrying limestone, civil structures, goods imported in the name of the registered office and refractories.

Analysis: The claim relating to refractories was prima facie supported because refractories were specified as capital goods under Rule 57Q. The objection based on the Bill of Entry being in the name of the registered office was also found prima facie untenable. The objection regarding civil structures was not accepted as a strong ground for denial at this stage. However, the claim relating to goods used in quarrying limestone was found arguable, and the distinction between Rule 57A and Rule 57Q was treated as significant.

Outcome: On a prima facie assessment, partial waiver of pre-deposit was granted on condition of depositing Rs. 8 lakhs, and recovery of the balance was stayed.

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