Revenue neutrality and Modvat credit justified unconditional stay of recovery and waiver of pre-deposit in an excise dispute.

Unconditional stay of recovery and waiver of pre-deposit were granted in an excise duty dispute where the Tribunal accepted revenue neutrality as the ative consideration. It noted that the disputed duty demand would be offset by Modvat credit available on the applicants' final dutiable chewing tobacco clearances, so the Revenue would not suffer any net loss. Relying on facts similar to an earlier stay order, the Tribunal treated the credit mechanism as sufficient basis to suspend recovery pending further proceedings.

---

---

Issues: Whether waiver of pre-deposit and stay of recovery should be granted in a dispute concerning excise duty demand on the disputed product, particularly on the ground of revenue neutrality and the availability of Modvat credit.

Analysis: The Tribunal found the facts similar to an earlier stay order where unconditional stay had been granted. It accepted the plea that the duty demand would be offset by Modvat credit on the final dutiable chewing tobacco cleared by the applicants, resulting in no net gain to the Revenue.

Outcome: Unconditional stay of recovery and waiver of pre-deposit were granted.

---