Pre-deposit waiver for disputed excise credit denied where amended rules confined input credit to factory use.

Under the amended excise rules effective from 1 April 2000, credit was confined to inputs used within the factory of production, so prima facie credit on explosives used outside the factory was not admissible. The Tribunal held that the Supreme Court ruling relied on by the appellant was inapplicable on those facts and that the material placed did not justify complete waiver of pre-deposit at the interim stage. Total waiver was therefore declined, and the appellant was directed to deposit Rs. 20 lakhs while the balance was waived during the pendency of the appeal.

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Issues: Whether total waiver of pre-deposit could be granted where, prima facie, credit on explosives used outside the factory was not admissible under the amended excise rules.

Analysis: The relevant excise rules were amended with effect from 1-4-2000, and Rule 57AA specifically confined credit to inputs used within the factory of production. In that context, the earlier Supreme Court ruling relied upon by the appellant was held to be inapplicable on the facts. The material placed before the Tribunal did not establish a fit case for complete waiver of the duty demand at the interim stage.

Conclusion: Total waiver of pre-deposit was declined. The appellant was directed to deposit Rs. 20 lakhs, with waiver of the balance amount during the pendency of the appeal.

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