Jurisdictional objection to customs-notification demand under the Central Excise Act justified waiver of pre-deposit and stay of recovery.

A demand based on alleged breach of a customs notification governing concessional duty on imported iron and steel scrap could, if recoverable at all, arise only under the Customs Act and not under the Central Excise Act. A prior remand to the Commissioner (Appeals) did not amount to approval of levy under the Central Excise Act. On that jurisdictional objection, the applicants established a prima facie case and were granted complete waiver of pre-deposit of duty and penalty, with recovery stayed pending appeal.

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Issues: Whether the applicants had made out a prima facie case for complete waiver of pre-deposit and stay of recovery where the demand related to non-fulfilment of conditions of a customs notification but had been raised under the Central Excise Act.

Analysis: The demand arose from alleged non-compliance with the conditions of Notification No. 83/90-Cus. governing concessional duty on imported iron and steel scrap. The Tribunal held that, if any duty was recoverable on that basis, it could arise only under the Customs Act and not under the Central Excise Act. A mere remand to the Commissioner (Appeals) did not amount to approval of the levy under the Central Excise Act. On that footing, the applicants established a prima facie case for interim relief.

Conclusion: The applicants were entitled to complete waiver of pre-deposit of duty and penalty, and recovery was stayed pending disposal of the appeal.

Ratio Decidendi: A demand founded on breach of a customs notification cannot be sustained under the Central Excise Act, and where that jurisdictional objection is made out prima facie, pre-deposit and recovery may be waived.

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