Prima facie Modvat credit entitlement justified waiver of pre-deposit where declared and disputed inputs fell under the same heading.

Applicants seeking Modvat credit faced a dispute because the inputs were alleged not to have been declared in the declaration. The material showed that M.S. rounds had been declared as inputs under heading 7214.90, and the disputed goods, described in some documents as RCS, were also treated as falling under the same heading. On that prima facie basis, and because the balance of convenience favoured the applicants, waiver of pre-deposit of duty and penalty was granted for hearing of the appeal.

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Issues: Whether the applicants were entitled to waiver of pre-deposit in a dispute relating to denial of Modvat credit on the ground that the inputs were not declared in the declaration.

Analysis: The applicants had declared M.S. rounds classifiable under heading 7214.90 as inputs. The disputed goods, described in some documents as RCS, were also treated as classifiable under the same heading. On that basis, the material disclosed a prima facie case and the balance of convenience favoured the applicants for the purpose of pre-deposit.

Outcome: Waiver of pre-deposit of duty and penalty was granted for hearing of the appeal.

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