Conditional exemption under Notification No. 6/2002-CE denied for credit on chassis, but pre-deposit waived on prima facie case

Notification No. 6/2002-CE was a conditional exemption and its benefit was unavailable where credit of duty paid on chassis had been taken, because the no-credit condition was not satisfied. The text also notes that the assessee nevertheless had a strong prima facie case since duty was being discharged after including the chassis value. On that basis, the Tribunal waived the entire pre-deposit of duty and penalty for hearing of the appeal.

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Issues: Whether the benefit of Notification No. 6/2002-CE could be denied where the assessee had taken credit of duty paid on chassis, and whether pre-deposit of duty and penalty was required to be made for hearing of the appeal.

Analysis: Notification No. 6/2002-CE was a conditional exemption notification, and its benefit was available only if no credit of duty paid on chassis had been taken. Since the assessee had availed credit on the duty paid chassis, the condition attached to the notification was not fulfilled. At the same time, the assessee had a strong prima facie case because duty was being discharged after including the value of the chassis as well. In these circumstances, the Tribunal granted waiver of the entire pre-deposit for the purpose of hearing the appeal.

Conclusion: The assessee was held entitled to waiver of pre-deposit of the entire duty and penalty pending appeal.

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