Captive consumption exemption applied for the pre-amendment period, so duty pre-deposit and penalty were waived.

Captively consumed intermediate goods were treated as eligible for exemption for the dispute period ending before Notification No. 16/97-C.E. dated 13-12-1997 took effect. Because the demand related to lay flat tubes used in manufacturing prior to that amendment, the later change in exemption position could not be relied on to deny relief for the earlier period. On that basis, pre-deposit of duty and equal penalty was waived and the stay petition was allowed.

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Issues: Whether pre-deposit of duty and penalty was required where the demand related to intermediate goods captively consumed during a period prior to the amendment introduced by Notification No. 16/97-C.E. dated 13-12-1997.

Analysis: The demand related to lay flat tubes captively consumed in the manufacture of the final product for a period ending before 13-12-1997. The relevant exemption position for captively consumed goods had not yet been altered by Notification No. 16/97-C.E. dated 13-12-1997. Since the dispute period preceded that amendment, the benefit of exemption could not be denied on the basis of the later change in law.

Conclusion: Pre-deposit of the duty and equal penalty was waived, and the stay petition was allowed.

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