SSI exemption turnover excludes exported packing materials; waiver of pre-deposit and stay of recovery granted on prima facie case.

Packing materials exported along with frozen marine products were held not to count as clearances for home consumption under the SSI exemption scheme because clearances on which no excise duty is payable are excluded from aggregate turnover under paragraph 3 of SSI Notification No. 8/2002-C.E. The exception in Explanation G for exports to Bhutan and Nepal did not apply on the facts, so the applicants established a strong prima facie case. Waiver of pre-deposit of duty and penalty, together with stay of recovery pending appeal, was therefore granted.

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Issues: Whether the applicants made out a prima facie case for waiver of pre-deposit and stay of recovery, on the ground that the disputed packing materials were exported along with frozen marine products and were therefore not to be counted as clearances for home consumption under the SSI exemption scheme.

Analysis: The disputed corrugated and duplex boxes were admittedly exported along with the frozen marine products. Clearances on which no excise duty is payable for any reason are not to be included while computing aggregate clearances for home consumption under paragraph 3 of SSI Notification No. 8/2002-C.E. dated 01.03.2002. The exception in Explanation G, which includes clearances for export to Bhutan and Nepal within home-consumption clearances for the purpose of the notification, did not apply on the facts. On this basis, a strong prima facie case for relief was made out.

Conclusion: The applicants were entitled to waiver of pre-deposit of duty and penalty and to stay of recovery pending the appeal.

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