Modvat credit recovery dispute: pre-deposit was not insisted upon and stay of collection was granted pending appeal.

In a Modvat credit dispute, the Tribunal noted that after the Supreme Court ruling on recovery of Modvat credit, recovery under Section 11A of the Central Excise Act was not available and, prima facie, pre-deposit under Section 35F could not be insisted upon in such matters. On the extraordinary facts recorded, the Tribunal exercised inherent powers to protect the appellant during the appeal. Stay of collection of the disputed amount was granted pending disposal of the appeal, and the appeal was admitted.

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Issues: Whether pre-deposit under Section 35F of the Central Excise Act could be insisted upon in a Modvat credit dispute, and whether stay of recovery was warranted pending appeal.

Analysis: The order records that, in light of the Supreme Court ruling on recovery of Modvat credit, resort to Section 11A for such recovery was not available, and prima facie Section 35F could not be invoked in Modvat matters after that ruling. The matter was treated as requiring consideration, and the Tribunal exercised inherent powers in the extraordinary circumstances noted in the order.

Outcome: Stay of collection of the disputed amount was granted during the pendency of the appeal, and the appeal was admitted.

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