Prima facie exemption under captive consumption notification supported only partial pre-deposit waiver in a manufacturing dispute.

Prima facie eligibility for exemption under Notification No. 67/95 was accepted in respect of untrimmed sheets captively consumed, because the emergence of waste in the trimming process did not, at this stage, defeat the exemption claim. On that basis, the demand linked to denial of the notification was treated as prima facie unsustainable. For the remaining demand, the applicants did not establish a strong case for complete waiver of pre-deposit, and financial hardship was also considered. Interim relief was therefore granted only in part, with partial pre-deposit directed and recovery of the balance stayed during pendency of the appeals.

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Issues: Whether the applicants made out a prima facie case for waiver of pre-deposit, including their entitlement to exemption under Notification No. 67/95 for untrimmed sheets captively consumed.

Analysis: The applicants manufactured billets, untrimmed sheets and, by trimming, trimmed sheets and circles. The order records a prima facie view that the mere emergence of waste in the trimming process did not disqualify untrimmed sheets captively consumed from exemption under Notification No. 67/95. On that basis, the demand of about Rs. 23 lakh relating to denial of the notification was held, prima facie, not sustainable. For the remaining demand, no strong prima facie case for full waiver was shown, and financial hardship was also taken into account while considering interim relief.

Conclusion: The applicants were granted only partial waiver of pre-deposit, with a direction to deposit Rs. 50 lakhs and stay of recovery of the balance during pendency of the appeals.

Final Conclusion: Interim relief was granted in part on a prima facie view of exemption eligibility, but the merits of the appeals remained open for final adjudication.

Ratio Decidendi: A prima facie view of eligibility to exemption and balancing of financial hardship can justify partial waiver of pre-deposit rather than complete waiver.

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