Prima facie absence of revenue loss justified waiver of pre-deposit and stay of recovery in a Modvat credit dispute.

Waiver of pre-deposit and stay of recovery were granted in a Modvat credit dispute where duty had been paid on the inputs and final products. The Tribunal found that no immediate loss to revenue was shown on a prima facie basis and, on that footing, allowed interim protection during the pendency of the appeals. The disputed credit denial and penalty were therefore not required to be deposited pending final adjudication, and recovery was stayed until the appeals were decided.

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Issues: Whether waiver of pre-deposit and stay of recovery should be granted pending appeal in a case involving Modvat credit and penalty.

Analysis: The application concerned denial of Modvat credit and imposition of penalty. The record showed that duty had been paid on the inputs and on the final products, and the Tribunal found that, at least prima facie, no immediate loss to revenue was demonstrated. In these circumstances, the Tribunal considered it appropriate to grant interim protection during the pendency of the appeals.

Conclusion: Waiver of the pre-condition to deposit the credit denied and the penalty imposed was granted, and recovery was stayed during the pendency of the appeals.

Final Conclusion: Interim relief was allowed in favour of the assessee, while the substantive appeals remained pending for final adjudication.

Ratio Decidendi: Where the material indicates a prima facie absence of revenue loss, pre-deposit and recovery of disputed duty and penalty may be stayed pending appeal.

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