Modvat repeal and absence of saving clause supported prima facie stay of recovery and waiver of pre-deposit.

A challenge to Modvat credit demand and penalty was treated as raising a strong prima facie case for interim relief because the dispute arose under the erstwhile Modvat rules, which had been repealed and replaced without a saving clause. The applicants relied on the repeal of Rules 57A to 57V and substitution by Rules 57AA to 57AK to argue that proceedings under the earlier regime should not continue in the same manner. The Tribunal accepted that the cited Supreme Court ruling and its own stay orders supported that contention, and granted waiver of pre-deposit and stay of recovery during the appeal.

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Issues: Whether the applicants had made out a prima facie case for waiver of pre-deposit and stay of recovery of Modvat credit demand and penalty, in view of the repeal of the earlier Modvat rules and substitution by new rules.

Analysis: The disputed credit and penalty arose under the erstwhile Modvat regime. The applicants relied on the repeal of Rules 57A to 57V of the Central Excise Rules and their substitution by Rules 57AA to 57AK, contending that the absence of a saving clause affected the continuation of proceedings under the earlier provisions. The Tribunal accepted that the cited Supreme Court ruling and the Tribunal's own stay orders supported that position, and therefore treated the challenge as raising a strong prima facie case at the interim stage.

Conclusion: The applicants were held entitled to waiver of pre-deposit and stay of recovery during pendency of the appeal.

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