Revenue neutrality and post-installation re-credit justified waiver of pre-deposit in an excise dispute over imported goods.

Pre-deposit of duty and penalty was treated as unnecessary where credit had been taken before installation of imported goods, but the goods were admittedly installed in the factory. Reversal of the premature credit and its re-credit after installation would create no net revenue effect, making the dispute revenue neutral. Relying on the applicable Larger Bench view, the matter was considered fit for waiver of pre-deposit, and recovery remained stayed during pendency of the appeal.

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Issues: Whether pre-deposit of duty and penalty should be waived where credit was taken before installation of the imported goods, but the goods were admittedly installed and the exercise of reversal and re-credit would be revenue neutral.

Analysis: The admitted position was that the goods had been installed in the factory. Even if the credit taken before installation were to be reversed, the assessee would be entitled to take the credit again after installation. On that footing, the contemplated reversal and re-credit involved no net revenue effect. In view of the Larger Bench decision on the issue, the case was treated as fit for waiver of pre-deposit.

Conclusion: Pre-deposit of duty and penalty was waived, and recovery remained stayed during pendency of the appeal.

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