Modvat credit dispute: pre-deposit waiver and recovery stay granted subject to freezing funds in the specified account.

A prima facie case was found for waiver of pre-deposit and stay of recovery in a dispute over alleged wrongful availment of Modvat credit on goods covered by an exemption notification. To protect revenue, the appellant was directed to freeze Rs. 10 lakhs in its RG 23A or RG 23C account within one month. On compliance with that condition, the pre-deposit requirement stood waived and recovery was stayed.

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Issues: Entitlement to waiver of pre-deposit and stay of recovery in respect of alleged wrongful availment of Modvat credit on goods covered by an exemption notification.

Analysis: The Tribunal recorded a prima facie view that the appellant had made out a case. To safeguard revenue, it required freezing of Rs. 10 lakhs in the appellant's RG 23A or RG 23C account within one month, and directed that upon such compliance the pre-deposit requirement would stand waived and recovery stayed.

Outcome: Waiver of pre-deposit and stay of recovery granted on compliance with the direction to freeze Rs. 10 lakhs in the specified account.

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