Pre-deposit waiver in captive consumption dispute granted subject to freezing the Modvat account as directed.

Waiver of pre-deposit was considered in a dispute over captive consumption of air-conditioner parts cleared under an exemption notification, together with the assessee's prima facie challenge to invocation of the extended period on alleged suppression. The tribunal granted waiver of the duty and penalty pre-deposit in substance, treating the assessee as having shown sufficient prima facie grounds at this stage. The relief was made conditional on freezing the Modvat account to the extent directed, preserving revenue safeguards while dispensing with immediate deposit.

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Issues: Whether waiver of pre-deposit of duty and penalty should be granted in proceedings concerning captive consumption of air-conditioner parts cleared under exemption notification, and whether the assessee had a prima facie case against invocation of the extended period on the allegation of suppression.

Outcome: The application was allowed in substance by granting waiver of pre-deposit of the duty and penalty amounts on the condition of freezing the Modvat account to the extent directed.

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