Appeal partly allowed, recovery of disallowed credit confirmed. Compliance required within 8 weeks.

The appeal was partly allowed, confirming the recovery of disallowed credit amounting to Rs. 32,81,274/- under sections 32, 81, and 274. The appellants were directed to deposit 60% of the demanded amount, with interest waived until the appeal's disposal. Compliance was required within eight weeks, with further proceedings scheduled for a specified date.

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Issues involved: Appeal against order imposing penalty and recovery of disallowed credit u/s 32,81,274/-.

The appeal was filed against an order partly allowing the appeal in relation to the imposition of penalty while confirming the recovery of the disallowed credit amounting to Rs. 32,81,274/- u/s duty paid on inputs, capital goods, and service tax. The Additional Commissioner had disallowed the credit as the final product was non-dutiable, ordering recovery along with interest and an equal amount of penalty.

The Advocate for the appellants relied on arguments presented in a previous case and sought to deposit only a portion of the demanded amount due to financial hardship. The DR, however, referenced a specific notification and argued against total waiver of the demanded amount, stating that the authority had considered the matter comprehensively.

The Tribunal, after considering the arguments and circumstances, found no prima facie case for total waiver of the duty demanded under the impugned order. Consequently, the appellants were directed to deposit 60% of the demanded amount while waiving the interest until the appeal's disposal. The compliance deadline was set for eight weeks from the date of the order. The case was scheduled for further proceedings and compliance report on a specified date.

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