Prima facie exemption under Notification No. 202/88 justified partial waiver of pre-deposit and stay on disputed excise duty demand.

Prima facie entitlement to exemption under Notification No. 202/88, and the duty-paid character of the disputed re-rolling materials, was treated as an arguable issue for purposes of pre-deposit and stay. The Tribunal noted that the contest over whether the goods were waste and scrap or duty-paid re-rollable inputs required examination at the regular hearing, so the applicants had made out a sufficient case for interim relief. Partial waiver of pre-deposit was therefore granted, and recovery of the balance demand and penalty was stayed subject to compliance with the directed deposits.

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Issues: Whether, for the purpose of waiver of pre-deposit and stay, the applicants had made out a prima facie case in relation to their claim of exemption under Notification No. 202/88 on the disputed re-rolling materials and duty-paid character of the inputs.

Analysis: The applications arose out of demands of central excise duty and penalty on the ground that the materials purchased by the applicants were waste and scrap and not duty-paid re-rollable inputs. The competing submissions turned on the correct characterisation of the goods, the scope of Notification No. 202/88, and whether the inputs were clearly recognisable as duty paid. The Tribunal noted that the rival contentions on terminology, the applicability of the notification, and the treatment of the materials would have to be examined at the stage of regular hearing. It found that the issue was arguable and that a conditional order on pre-deposit was warranted.

Conclusion: Partial waiver of pre-deposit was granted, the balance demand and penalty were stayed on compliance with the specified deposits, and recovery of the remaining amounts was suspended during the appeal.

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