Broken noodles retained as noodles in brittle form; pre-deposit of duty required and balance penalty waived on compliance.

Broken noodles arising in manufacture were treated as retaining the character of noodles in brittle form, rather than as waste or scrap, because the record did not show competent certification that they were unfit for human consumption. On that basis, the Revenue's reliance on Rule 6 of the Cenvat Credit Rules, 2002 was accepted for purposes of interim relief, and the appellants were directed to pre-deposit the entire duty demand. The remaining penalty was ordered to stand waived on compliance with the pre-deposit direction.

---

---

Issues: Whether the appellants were required to pre-deposit the duty demand arising from clearance of broken noodles and whether penalty could be waived pending appeal.

Analysis: The dispute concerned broken noodles arising in manufacture and whether they could be treated as waste or scrap distinct from noodles. The record did not contain evidence, such as certification from the competent authorities, to show that the broken noodles were unfit for human consumption or had ceased to be noodles. The goods were held to retain the character of noodles in a brittle form, and the Revenue had invoked Rule 6 of the Cenvat Credit Rules, 2002 on the footing that duty was payable in respect of exempted goods. In that background, the Tribunal directed pre-deposit of the duty demanded and indicated waiver of the remaining penalty upon compliance.

Conclusion: The appellants were directed to pre-deposit the entire duty demand, and the balance penalty was ordered to stand waived on compliance.

---