Prima facie waiver of pre-deposit denied where nil-duty inputs clouded eligibility for excise exemption.

In proceedings on the availability of Notification No. 202/88-CE, the Tribunal considered whether the appellants had established a prima facie case for waiver of pre-deposit. The dispute arose because ship-breaking scrap used as raw material had been exempted under Notification No. 44/93-CE, and the earlier view treated inputs attracting nil duty as non-duty-paid for exemption conditions. On that basis, the benefit of Notification No. 202/88-CE was not shown to be clearly available at the stay stage. The appellants therefore failed to justify unconditional waiver of pre-deposit and were directed to deposit the duty amount.

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Issues: Whether the appellants had made out a prima facie case for waiver of pre-deposit in proceedings concerning denial of the benefit of Notification No. 202/88-CE.

Analysis: The appellants were manufacturing products falling under Chapter 72 of the Central Excise Tariff Act, 1985 and were availing exemption under Notification No. 1/93-CE as well as Notification No. 202/88-CE. The dispute turned on the denial of Notification No. 202/88-CE on the ground that ship breaking scrap used as raw material had been exempted under Notification No. 44/93-CE dated 01.03.93. The Tribunal noted the earlier view that inputs attracting nil rate of duty are to be treated as non-duty-paid for the purpose of the exemption condition, and therefore the benefit of Notification No. 202/88-CE was not shown to be clearly available at the stay stage.

Conclusion: The appellants failed to establish a prima facie case for unconditional waiver of pre-deposit, and were directed to deposit the duty amount.

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