Pre-deposit waiver on burnt sand cleared as waste was granted after a prima facie case was shown.

Burnt sand cleared after manufacture of iron and aluminium castings was treated as waste arising from the casting process, even though it was also sold and used in other industries. On that basis, and relying on an earlier decision on a similar issue, the Tribunal found a prima facie case for complete waiver of pre-deposit at the stay stage. Recovery of duty, interest and penalty was stayed pending disposal of the appeals.

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Issues: Whether the appellants were entitled to waiver of pre-deposit of duty, interest and penalty and stay of recovery pending disposal of the appeals.

Analysis: The dispute arose from demand of central excise duty on burnt sand cleared after manufacture of iron and aluminium castings. The record showed that natural sand was used for making sand moulds and, after casting, the sand became burnt and was cleared as waste, though it was also sold for consideration and used in other industries. The Tribunal noted that a previous decision on a similar issue had granted relief and, on that basis, found that the appellants had made out a prima facie case for complete waiver at the stay stage.

Conclusion: The appellants were entitled to waiver of pre-deposit of duty, interest and penalty, and recovery was stayed till disposal of the appeals.

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