Conditional pre-deposit waiver granted in Modvat credit dispute after shift from Modvat to SSI exemption scheme.

Conditional waiver of pre-deposit was granted where the dispute concerned Modvat credit on inputs under processing when the applicants shifted from the Modvat scheme to the SSI exemption scheme. The Tribunal treated the applicability of the relevant Modvat provisions as arguable in light of a Larger Bench decision and noted that no specific plea of financial hardship had been made, although the applicants were an SSI unit. Relief was therefore limited to a partial deposit, with recovery of the balance stayed pending appeal.

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Issues: Whether the applicants were entitled to waiver of pre-deposit and stay of recovery of the disputed duty amount pending appeal.

Analysis: The dispute concerned credit taken on inputs that were under processing when the applicants opted out of the Modvat scheme and moved to the SSI exemption scheme. The applicability of the relevant Modvat provisions was considered arguable in light of the Larger Bench decision cited before the Tribunal. The application also disclosed no specific plea of financial hardship, though the applicants were an SSI unit. On these facts, the Tribunal found sufficient grounds to grant conditional relief.

Conclusion: The applicants were granted conditional waiver of pre-deposit. They were directed to deposit Rs. 25,000 within six weeks, and recovery of the balance was stayed pending the appeal.

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