Compounded levy scheme eligibility turns on pre-production application and existing-factory status under the textile notification.

An independent textile processor seeking benefit under Notification No. 32/2001-C.E. had to apply before commencement of commercial production under para 7(1). The unit's application was made before production began, so the express requirement was satisfied. Para 7(2), which applies to processing factories existing as on 1-5-2001, was inapplicable because prior excise registration alone did not establish that the unit was an existing processing factory for that purpose. On that basis, a prima facie case was made out for unconditional stay and waiver of pre-deposit.

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Issues: Whether the appellant was entitled to unconditional waiver of pre-deposit in relation to denial of the compounded levy scheme benefit under Notification No. 32/2001-C.E. dated 28-6-2001.

Analysis: The relevant condition in para 7(1) required an independent textile processor to apply prior to commencement of commercial production. The appellant's commercial production commenced only on 23-8-2001, while the application for the notification benefit was made on 16-8-2001, thus satisfying the express requirement of para 7(1). Para 7(2), dealing with processing factories existing as on 1-5-2001, was held inapplicable because mere excise registration before production did not establish that the unit was an existing processing factory for that purpose.

Conclusion: The appellant made out a prima facie case for unconditional stay and waiver of pre-deposit.

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