Prima facie relief on duty demand and CENVAT credit denial granted for biscuit packing material dispute.

Waiver of pre-deposit and stay of recovery were granted on a prima facie basis where duty was demanded on corrugated boxes used as biscuit packing material and CENVAT credit on input services was denied. The Tribunal noted that biscuits were exempt during the relevant period and that the lower authorities had not shown convincing grounds for treating the packing material as an intermediate product liable to duty under Notification No. 67/95-CE. It also recorded the assessee's position that no CENVAT credit had been taken on Kraft paper and that it was not manufacturing corrugated boxes. The record and the limited quantum supported interim relief pending appeal.

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Issues: Whether the assessee was entitled to waiver of pre-deposit and stay of recovery of the adjudged duty and connected dues pending appeal.

Analysis: The appeal concerned duty demand on corrugated boxes said to be used as packing material for biscuits, along with denial of CENVAT credit on input services. The Tribunal noted that the final product, biscuits, was exempt during the relevant period, but the lower authorities had not disclosed convincing grounds for treating the packing material as an intermediate product liable to duty under Notification No. 67/95-CE. The assessee also stated that no CENVAT credit had been taken on Kraft paper and that it was not manufacturing corrugated boxes. In view of the record and the small amount involved, the Tribunal found a prima facie case for interim relief.

Conclusion: Waiver and stay were granted in favour of the assessee in respect of the adjudged dues, including the denial of CENVAT credit on input services.

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