Prima facie exemption for thrust bearing assembly supported waiver of pre-deposit and stay of recovery.

A thrust bearing assembly, consisting of a housing bearing thrust block, bearing covers and lock nuts, was examined for exemption under Notification No. 6/2000-C.E. The material indicated that some components were manufactured as cast articles and the remaining elements were procured from vendors according to drawings, and the assembly was found, at least prima facie, not to be a bearing excluded from the notification. In that setting, the applicants established a prima facie case for waiver of pre-deposit and for stay of recovery of duty and penalty pending appeal, with the limitation objection noted in relation to the extended period under the Central Excise Act.

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Issues: Whether the applicants had made out a prima facie case for waiver of pre-deposit and stay of recovery in respect of duty and penalty, on the ground that the thrust bearing assembly was eligible for exemption under Notification No. 6/2000-C.E. and was not a bearing excluded from the notification.

Analysis: The duty and penalty demand arose under Section 11AC of the Central Excise Act, 1944, and the objection of limitation was linked to the invocation of the proviso to Section 11A(1) of the Central Excise Act, 1944. On the material placed, the thrust bearing assembly was described as comprising a housing bearing thrust block, bearing covers and lock nuts, with some parts manufactured as cast articles and the remaining elements procured from vendors as per drawings. In that background, the assembly was found, at least prima facie, not to be a bearing excluded from the scope of Notification No. 6/2000-C.E. dated 01.03.2000.

Conclusion: The applicants established a prima facie case for waiver of pre-deposit and for stay of recovery pending the appeal.

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