Coercive recovery stayed where exemption dispute and Board consideration of prevailing practice remained pending

Coercive recovery was treated as unwarranted where duty demand on disputed by-products arose from denial of exemption for wastes, parings and scrap, and a representation on the asserted prevailing non-payment practice was still under consideration. A survey had also been initiated for possible action under Section 11C of the Central Excise Act, and the existing Board circular indicated that recovery should not be pressed in such circumstances. On that basis, waiver and stay were granted pending further consideration of the exemption issue.

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Issues: Whether waiver and stay should be granted against the adjudged duty demand pending the Board's consideration of a representation and the ongoing survey concerning the practice of non-payment of duty on the disputed by-products.

Analysis: The demand arose from denial of exemption under the notification for wastes, parings and scrap, on the ground that fatty acids, wax and gum were not waste. The representation made to the Central Board of Excise & Customs seeking exemption on the basis of an asserted prevailing practice was under consideration and a survey had been initiated. An earlier Board circular stated that, where a survey was floated for issuing or examining a notification under Section 11C of the Central Excise Act, coercive recovery should not be taken. In these circumstances, coercive recovery was not warranted.

Conclusion: Waiver and stay were granted.

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