Conflicting Modvat credit rulings supported prima facie waiver of pre-deposit and partial stay of duty and penalty.

Conflicting Tribunal views on whether Modvat credit could be denied for want of a Rule 57G declaration supported a prima facie case for interim relief. On that basis, the assessee was treated as entitled to consideration of credit at the pre-deposit stage, since the claimed credit could reduce the duty liability. The objection that there had been deliberate contravention, and the reliance on the extended period, were not accepted as sufficient to deny stay at that stage. Partial waiver of duty and penalty was granted, with a direction to deposit the balance amount.

---

---

Issues: Whether, for the purpose of waiver of pre-deposit and stay, the assessee was entitled to prima facie consideration of Modvat credit despite absence of a Rule 57G declaration, and whether that prima facie view justified partial waiver of duty and penalty.

Analysis: The Tribunal noted that there were conflicting views on whether Modvat credit could be denied merely because a declaration under Rule 57G had not been filed. In the presence of such divergent Tribunal decisions, the assessee was held to have a prima facie case for consideration of credit, which would reduce the duty liability. The objection based on deliberate contravention and the extended period was also not treated as sufficient at this stage to deny interim relief.

Conclusion: The assessee was directed to deposit Rs. 10 lakhs and was granted waiver of the remaining duty and penalty with stay of recovery.

Final Conclusion: The application for interim relief was allowed in part on a prima facie assessment of Modvat credit eligibility, resulting in partial waiver and stay.

Ratio Decidendi: Where conflicting Tribunal views exist on a substantive credit entitlement, that divergence can support a prima facie case for partial waiver of pre-deposit and stay.

---