Exemption notification interpretation supports waiver of pre-deposit where non-duty-paid material may be used with duty-paid inputs.

The Tribunal examined whether the exemption notification required the final product to be made only from specified duty-paid raw materials. It read Notification No. 6/2002-C.E. as not imposing that restriction and held, prima facie, that the appellant could use non-duty-paid material along with duty-paid specified material. On that interpretation, the appellant made out a prima facie case for waiver of pre-deposit of duty, interest and penalty, and recovery was stayed pending the appeal.

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Issues: Whether the appellant had made out a prima facie case for waiver of pre-deposit in respect of duty, interest and penalty, having regard to the conditions of the exemption notification.

Analysis: The Tribunal examined the conditions attached to the exemption under Notification No. 6/2002-C.E. and found that the language did not require the final product to be manufactured only from specified duty-paid raw material. On that reading, the appellant could use non-duty-paid material along with duty-paid specified material. The Tribunal also found that the cited Supreme Court decision prima facie supported this interpretation.

Conclusion: The appellant established a prima facie case for waiver of pre-deposit.

Final Conclusion: The pre-deposit requirement was waived and recovery was stayed till disposal of the appeal.

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