Pre-deposit waiver for acrylic reprocessed granules denied where evidence of qualifying scrap origin was insufficient.

Exemption under Sr. No. 78 of Notification No. 4/2006-CE applies only to plastic materials reprocessed in India from scrap or waste of specified goods, and Chapter Note 7 to Chapter 39 excludes certain waste, parings and scrap of a single thermoplastic material transformed into primary forms. On the record, there was insufficient evidence that the imported acrylic reprocessed granules were produced from qualifying waste or scrap, as the invoices, bills of entry and origin certificate described the goods inconsistently and indicated mixed colours. Complete waiver of pre-deposit was therefore not justified at the stay stage, and partial pre-deposit was directed with balance recovery stayed pending appeal.

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Issues: Whether the appellant had made out a prima facie case for complete waiver of pre-deposit and stay of recovery in respect of the demand arising from denial of exemption under Sr. No. 78 of Notification No. 4/2006-CE dated 11.03.2006.

Analysis: The exemption under Sr. No. 78 applies to plastic materials reprocessed in India out of scrap or waste of goods falling within specified chapters, while Chapter Note 7 of Chapter 39 of the Customs Tariff Act, 1975 indicates that heading 3915 does not apply to waste, parings and scrap of a single thermoplastic material transformed into primary forms. On the record, there was no sufficient evidence that the imported acrylic reprocessed granules were made out of waste, parings or scrap of plastic materials falling under Chapter 39. The invoices and bills of entry indicated mixed colours, and the origin certificate described the goods differently, so complete waiver was not justified at the stay stage.

Conclusion: The appellant was not entitled to full waiver of pre-deposit; a deposit of Rs. 5 lakhs was directed, and recovery of the balance was stayed pending disposal of the appeal.

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