ORDER
M.V. Ravindran, Member (J)
Page 0598
1. This application is directed against the stay of demand of Rs. 1,96,298/- and the penalty imposed.
2. Heard both sides and perused the record.
3. I find from the record that the applicants were denied Modvat Credit on HDPE Sacks for the period March, 1994 to March, 1995 on the ground that the applicants had not availed of Credit immediately on settlement of the dispute by the Tribunal. This Tribunal vide its Order dated 16.3.98 had settled the dispute in respect of Credit in respect of HDPE Sacks in favour of the applicants. The applicants had from 1.6.94 taken quantitative credit in RG-23, Part I as per Board’s Circular No. 4/91-CX dated 14.2.1991. In that Circular Board had clarified as follows:
The matter has been examined. Board has decided that in case of disputed inputs show cause notices need not be issued if the assessee gives an undertaking that the credit would be taken on such disputed inputs only in RG23A Part I and will not be utilized till the dispute is finally settled. The assessee can pay duty from PLA under protest to the extent of credit involved under disputed inputs. When the dispute is finally settled the credit can be suitable adjusted. Board has also desired that the disputes should be resolved as soon as possible and preferably within a period of 6 months.
4. Based on the above clarification, the appellants have been taking the quantitative Credit in RG23A Part I and on settlement of the dispute availed Modvat credit in RG23 Part II in February, 2000. To my mind the appellants have made out a prima facie case for waiver of pre-deposit of the duty and penalty. Accordingly, pre-deposit of duty and penalty is waived and recovery thereof is stayed till the disposal of the appeal.
(Dictated and pronounced in the Open Court.)