Modvat credit on capital goods: conditional pre-deposit relief granted, with recovery stayed during the appeal.

In proceedings over denial of Modvat credit on capital goods, the applicants were required to freeze Rs. 22 lakhs in the RG 23C Register during the appeal. On compliance with that condition, the remaining pre-deposit was waived and recovery was stayed pending disposal of the appeal.

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Issues: Whether, in proceedings concerning denial of Modvat credit on capital goods, the applicants were entitled to waiver of pre-deposit and stay of recovery during the pendency of the appeal.

Outcome: The applicants were directed to freeze Rs. 22 lakhs in the RG 23C Register during the appeal proceedings, and on compliance the remaining pre-deposit was waived and recovery stayed.

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