Waiver of pre-deposit granted where accounted goods returned under CT-3 and no diversion was shown in excise records

Goods received under CT-3 for use in manufacture, and later returned to the original manufacturer under proper invoices and AR-3A, were found to have been accounted for with no indication of diversion. On that factual basis, a prima facie case was made that the demand fell within the Central Excise Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods Rules, 2001. The appellant was therefore held entitled to waiver of pre-deposit, and recovery of the duty and penalty was stayed pending disposal of the appeal.

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Issues: Whether the appellant was entitled to waiver of pre-deposit and stay of recovery of the duty and penalty demanded.

Analysis: The goods were received under CT-3 for use in manufacture and were later returned to the original manufacturer under proper invoices and AR-3A. The record indicated that the goods had been accounted for and there was no diversion. On that basis, the appellant made out a prima facie case that the demand was covered by the Central Excise Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods Rules, 2001.

Conclusion: The application for waiver of pre-deposit was allowed and recovery was stayed till disposal of the appeal.

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