Prima facie exemption claim on bamboo and wood pulp plant rejected only with evidence, supporting waiver of pre-deposit.

For stay and pre-deposit purposes, the assessee showed a strong prima facie case for the benefit of Notification No. 6/2002-CE because the available material did not establish that its factory had a plant for making bamboo or wood pulp. The General Manager's statement only confirmed the presence of digesters used for agro residues and long fibres, while the technical opinion from IIT, Kharagpur noted the absence of plant for wood debarking, wood chipping, chip separation or screening. On that basis, the exemption claim could not be rejected at the interim stage, and waiver of pre-deposit of duty and penalty was granted.

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Issues: Whether the appellant had made out a prima facie case for waiver of pre-deposit in respect of the duty demand and penalty by showing that it was entitled to the benefit of Notification No. 6/2002-CE.

Analysis: The dispute turned on whether the factory had a plant attached thereto for making bamboo or wood pulp, which would disqualify the appellant from the concessional exemption under the notification. The statement of the General Manager did not state that the digesters were being used for making bamboo or wood pulp, but only showed that ten digesters existed, with eight for agro residues and two for long fibres. The technical opinion from IIT, Kharagpur indicated that the factory had no plant for wood debarking, wood chipping, chip separation or screening, and that the plant was basically suitable for fibres and agro residues only. In the absence of evidence showing capability to manufacture bamboo or wood pulp, the appellant's claim was found to have strong prima facie support.

Conclusion: The appellant was entitled to waiver of pre-deposit of the entire duty and penalty for hearing of the appeal.

Ratio Decidendi: For purposes of stay and pre-deposit, where the available material prima facie does not establish that the assessee's factory is equipped with a plant for making bamboo or wood pulp, the exemption claim under the notification cannot be rejected at the interim stage.

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