Modvat credit on cranes and forklift trucks justified modification of pre-deposit and stay of duty recovery.

Subsequent Tribunal authority recognising cranes as capital goods under Rule 57Q, and forklift trucks where their use is essential to manufacture, was treated as creating a strong prima facie case for Modvat credit. The objection that modification of the stay order would amount to review was rejected because the order was interlocutory and not appealable. On that basis, the earlier pre-deposit direction was modified and, on execution of a bank guarantee for the duty amount within the stipulated time, pre-deposit was waived and recovery stayed.

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Issues: Whether the earlier pre-deposit condition in the stay order should be modified and recovery of duty stayed on execution of a bank guarantee in view of the subsequent decision holding cranes and forklift trucks to be eligible for Modvat credit as capital goods.

Analysis: The application was considered on the basis of the subsequent Tribunal decision recognising cranes as capital goods under Rule 57Q and noting that forklift trucks could qualify where their use is essential for manufacture. That development was treated as creating a strong prima facie case in favour of the applicant. The objection that modification of the stay order would amount to review was rejected, the order being interlocutory in nature and not appealable.

Outcome: The earlier direction for pre-deposit was modified. On execution of a bank guarantee for the duty amount within the stipulated time, pre-deposit of duty was waived and recovery stayed.

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