Modvat credit pre-deposit waiver denied absent proof of stock inputs and normal-course credit, with reversal directed.

Prima facie waiver of pre-deposit was refused where the applicants were already operating under the Modvat scheme and the record did not show that the inputs were lying in stock on the relevant date or that credit had been taken in the normal course. On that basis, complete dispensing with the duty pre-deposit was not warranted. The applicants were directed to reverse the credit from the RG-23A Part-II account, and the penalty was waived subject to that reversal, with compliance to be verified before the appeal was heard.

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Issues: Whether the applicants made out a prima facie case for dispensing with pre-deposit of the duty confirmed on disallowance of Modvat credit under Rule 57H.

Analysis: The applicants were already operating under the Modvat scheme, and the records did not establish that the inputs were lying in stock on the relevant date or that credit had been taken in the normal course. In these circumstances, a prima facie case for complete waiver was not made out.

Outcome: The pre-deposit condition was not fully dispensed with. The applicants were directed to reverse the credit from the RG-23A Part-II account, and the penalty was waived subject to such reversal, with compliance to be checked before the appeal was taken up.

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