Modvat credit on invoices in loan licencee's name accepted for interim relief where manufacture was for that licencee.

Invoices issued in the name of a loan licencee were treated as acceptable Modvat documents where the goods were manufactured in the appellant's factory for that licencee under Notification No. 27/92-C.E. The Tribunal relied on its earlier identical ruling and held that, on those facts, the appellant had made out a prima facie case that denial of credit was unsustainable for interim purposes. As the major part of the demand was covered by that precedent, pre-deposit was dispensed with and stay was granted.

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Issues: Whether the appellant had made out a prima facie case for dispensing with pre-deposit in respect of Modvat credit denied on invoices standing in the name of the loan licencee.

Analysis: The denial of credit was based on the invoices being in the name of the loan licencee, though the goods were manufactured in the appellant's factory for that loan licencee under Notification No. 27/92-C.E. The Tribunal noted that, on identical facts, it had already held that such invoices could be accepted as documents for Modvat purposes under Rule 57G when the notification itself contemplated manufacture for the loan licencee. Since the major part of the demand was covered by that precedent, a prima facie case for interim relief was made out.

Conclusion: The application for dispensing with pre-deposit was allowed and stay was granted in favour of the appellant.

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