Judgment:
1. Deemed modvat credit of Rs. 2,55,287/- taken in terms of Notification NO. 58/97 CE dated 30.8.97 has been denied to the applicants on the ground that this amount of credit was taken on inputs received from M/s Vivek Steel Industries who had not deposited the amount of interest payable on delayed payment of duty and M/s Ganpati Steel & Agro Industries who had not paid full and final duty on the inputs manufactured by them. In addition penalty of Rs. 63,822/- has been imposed upon the applicants.
2. None appears for the assessee when the case is called. Since the matter has already been adjourned once, we see no reason to keep this stay application pending any longer and hence we proceed to hear Shri Prabhat Kumar, Ld SDR and peruse the records.
3. The issue of admissibility of deemed credit under notification mentioned above is debatable and can be decided only when the appeal is heard finally. Having regard to the totality of facts and circumstances of the case, we direct pre deposit of Rs. one lakh towards duty within 4 weeks from the date of receipt of this order and on such deposit, pre deposit of balance duty and penalty shall stand waived and recovery thereof stayed pending the appeal.
4. Failure to comply with this direction shall result in vacation of stay and dismissal of appeal without prior notice.