Captive consumption exemption under Notification 67/95-C.E. supports prima facie waiver of pre-deposit for manufacturing inputs.

Captively consumed MS angles, MS channels and joists used in coal elevator, chamber separator and coal gasifier were held prima facie to fall within Notification No. 67/95-C.E., because they appeared to be used in relation to manufacture of the final product within the factory. On that interim view, the denial of exemption by the lower authorities was considered flawed for pre-deposit purposes, and the appellant established a prima facie case for waiver of the pre-deposit condition. Recovery was stayed pending disposal of the appeal, while the cited Supreme Court ruling was distinguished on the basis that the relevant contention had not been raised there.

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Issues: Whether the appellant made out a prima facie case for dispensing with pre-deposit by showing that MS angles, MS channels and joists manufactured and captively consumed in the factory were covered by Notification No. 67/95-C.E.

Analysis: Notification No. 67/95-C.E. exempts captively consumed capital goods and specified inputs manufactured in a factory and used within the factory of production in or in relation to the manufacture of final products. The disputed goods were used for coal elevator, chamber separator and coal gasifier, which were essential components of the appellant's production unit. On a prima facie view, the use of these goods was in relation to the manufacture of the final product, and the denial of exemption by the lower authorities was found to be flawed at the interim stage. The relied-upon Supreme Court decision was distinguished because the relevant contention was not raised before the Tribunal in that case.

Conclusion: The appellant made out a prima facie case for the benefit of Notification No. 67/95-C.E. and for waiver of the condition of pre-deposit, with recovery stayed pending disposal of the appeal.

Ratio Decidendi: Where captively consumed goods are shown prima facie to be used in relation to the manufacture of the final product, exemption under Notification No. 67/95-C.E. can justify waiver of pre-deposit at the interim stage.

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