Modvat credit for exhaust fans as capital goods under Rule 57Q supported waiver of pre-deposit and stay of recovery.

Exhaust fans were treated as capital goods eligible for Modvat credit under Rule 57Q because they fell within Heading 84.14 of the Central Excise Tariff, and the exclusion in the relevant explanation applied only to compressors under that heading. On that basis, the balance of convenience supported interim protection, and the applicant was granted waiver of the entire duty pre-deposit with stay of recovery during pendency of the appeal.

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Issues: Whether exhaust fan was eligible for Modvat credit as capital goods under Rule 57Q of the Central Excise Rules, and whether waiver of pre-deposit and stay of recovery should be granted.

Analysis: The dispute turned on whether exhaust fans fell within Heading 84.14 of the CET and were covered by the capital goods provision, with only compressors under that heading excluded by the relevant explanation to Rule 57Q. On that basis, the balance of convenience was found to be in favour of the applicant for interim relief.

Conclusion: The applicant was entitled to waiver of the entire duty pre-deposit and stay of recovery during pendency of the appeal.

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