Judgment:
1. The prayer in this stay petition is for waiver of condition of predeposit of duty of Rs.1,58,607.55 demanded from the appellants/applicants and penalty of Rs. 15,000/- imposed on them vide Order-in-Original No.34/Demand/MDP/98 dated 11.6.98 which was upheld by the Commissioner of Central Excise (Appeals), Calcutta vide his Order-in-Appeal No.111/Cal.II/99 dated 31.3.2000.
2. The dispute related to the reversal of modvat credit already availed of in respect of inputs and also in respect of inputs contained in the final product lying in stock as on 23.7.96 and awaiting clearance, on the basis of Notification 16/96-CE dated 23.7.96. Shri B.N.Chattopadhyay, ld.Consultant appearing for the appellants/applicants, submits that there is a case law both in their favour as well as against the appellants. He fairly concedes that there is also a decision of the Larger Bench of the Tribunal in the case of Khanbhai Essoofbhai & Ors. Vs. Commr. of Central Excise, Cal. & Ors. reported in 1999 (30) RLT 519 (CEGAT-LB) wherein, relying on the judgement of the Hon'ble High Court of Allahabad, held that the credit taken when the final product was dutiable shall be recovered/reversed on the final product being fully exempted subsequently in respect of the inputs in stock and inputs contained in under process material or final product in stock on the day of issue of exemption. He, however, submits that the demand is hit by limitation. He, therefore, prays for grant of unconditional stay.
3. Shri R.K. Roy, ld.JDR appearing for the Revenue, submits that the matter is settled by the decision of the Larger Bench as rightly pointed out by the ld.Consultant. He, therefore, opposes the prayer for grant of unconditional stay. As regards limitation aspect, ld.JDR, submits that the show-cause notice was well within time as it was issued on 24.2.97 covering the period September 1996 to 3rd December, 1996.
4. After hearing both sides, I am of the view that the appellants/applicants have not been able to make out the prima-facie case in their favour as there is already Larger Bench decision against them. However, what is required to be examined is whether the show-cause notice has been issued in time, and for this purpose the show-cause notice available on record does not disclose the date on which the credit was taken. These details can be looked into during the course of final hearing. At this stage, the ends of justice would be met if the appellants/ applicants are asked to deposit an amount of Rs.1,00,000/- within a period of eight weeks from today. Ordered accordingly. Subject to the predeposit of the said amount, the balance amount of duty and penalty shall not be recovered. Matter to come up for ascertaining compliance on 26th March, 2001.