Prima facie capital goods under Rule 57Q supported waiver of pre-deposit and stay of recovery in excise matters.

Prima facie waiver of pre-deposit and stay of recovery under Section 35F was considered justified where the lower authority had not properly applied its mind to the stay applications and the assessee had already furnished bank guarantee security. Wires and cables used to distribute electricity within the factory were treated as prima facie capital goods under Rule 57Q because they supported the manufacturing process. Components of machinery used for grinding cement clinker and coal were also treated as prima facie covered by the amended Rule 57Q table and explanation, supporting interim relief and remand on merits without insisting on deposit.

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Issues: (i) Whether the appellant had made out a prima facie case for waiver of pre-deposit and stay of recovery under Section 35F; (ii) Whether wires and cables used for distribution of electricity in the factory could be treated as capital goods under Rule 57Q; (iii) Whether components of machinery used for grinding cement clinker and coal were capital goods under Rule 57Q.

Issue (i): Whether the appellant had made out a prima facie case for waiver of pre-deposit and stay of recovery under Section 35F.

Analysis: The order of the lower authority proceeded without proper consideration of the facts of each appeal and without application of mind to the stay applications. The denial of credit on a pre-authenticated invoice was treated as a procedural matter, and substantial security had already been furnished by bank guarantee. In these circumstances, the appellant was found to have a prima facie case for interim relief.

Conclusion: Waiver of pre-deposit and stay of recovery were justified in favour of the assessee.

Issue (ii): Whether wires and cables used for distribution of electricity in the factory could be treated as capital goods under Rule 57Q.

Analysis: The wires and cables were used in the factory for distributing electricity to plants and machinery, without which the manufacturing process could not function. The claim was considered prima facie supportable by the broader understanding of capital goods and by the relevant larger bench view relied upon in the order.

Conclusion: Wires and cables were prima facie treated as capital goods, supporting the assessee's claim.

Issue (iii): Whether components of machinery used for grinding cement clinker and coal were capital goods under Rule 57Q.

Analysis: By the time credit was taken, the rule had been amended to specify items of machinery treated as capital goods. The components in question appeared to fall within the table to Rule 57Q and the associated explanation, and no additional purpose-based restriction was then required for the prima facie determination.

Conclusion: The components were prima facie covered as capital goods and the assessee was entitled to interim relief.

Final Conclusion: The interim orders were set aside, the pre-deposit requirement was waived, recovery was stayed, and the matters were remitted for disposal on merits without insisting on deposit.

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