Predeposit waiver and stay relief granted in exemption dispute over captive clinker used for cement cleared to SEZ units

Interim relief was granted in a dispute over denial of exemption under Notification No. 67/95-CE for clinker captively consumed in cement cleared to SEZ units. Relying on an earlier identical stay order and a connected precedent, the Tribunal found that the proviso to the notification was, prima facie, not attracted and that the applicant had made out a case for protection during appeal. Entire waiver of predeposit was therefore allowed, and recovery of duty, interest and penalty was stayed pending disposal of the appeal.

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Issues: Whether the applicant was entitled to waiver of predeposit of duty, interest and penalty and stay of recovery during pendency of the appeal.

Analysis: The dispute arose from denial of exemption under Notification No. 67/95-CE in respect of clinker captively consumed in manufacture of cement cleared to units in a Special Economic Zone. The Tribunal noted that an identical issue had earlier been considered and that stay had been granted on the basis that, prima facie, the proviso to the notification was not attracted. Following the earlier stay orders and the view taken in the connected precedent, the Tribunal found that the applicant had made out a case for interim relief.

Conclusion: Waiver of the entire predeposit was granted and recovery of the dues was stayed pending appeal, in favour of the assessee.

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