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of <h1>Duty exemption issue under Notification No. 202/88 deemed arguable: Deposit required for appeal</h1> The Tribunal found the issue regarding duty exemption under Notification No. 202/88 and the nature of purchased materials to be arguable. It required the ... Stay/Dispensation of pre-deposit - Re-rolling material Issues Involved:Waiver of pre-deposit and stay of demand of Central Excise duty and penalty imposed by the Commissioner of Central Excise under three separate orders.Analysis:1. Interpretation of Notification No. 202/88:The applicants claimed duty exemption under Notification No. 202/88 for purchasing used rail sleepers, rails, wheels, etc., as re-rollable materials. The counsel argued that since these materials were duty paid when purchased by Railways, they should be considered duty paid even after resale. The burden of proving non-duty paid status of inputs lay with the department, as per a previous Tribunal decision. The counsel highlighted the explanation to the notification deeming all stocks of inputs, except those clearly non-duty paid, as duty paid.2. Nature of Purchased Materials - Waste and Scrap vs. Re-rollable Materials:The department contended that the purchased materials were waste and scrap, not re-rollable materials, as claimed by the applicants. The department emphasized that no duty was paid on waste and scrap sold by Railways, which were not generated from manufacturing activities. The department argued that the benefit of the notification applied only to inputs used for manufacturing finished products, not waste and scrap. Reference was made to Tribunal decisions regarding waste and scrap generated from ship breaking.3. Requirement for Deposit and Stay of Recovery:After considering both parties' arguments, the Tribunal found the issue to be arguable and required the applicants to deposit specified sums within 10 weeks to hear the appeals on merits. Failure to comply would result in appeal dismissal. The Tribunal waived pre-deposit of the remaining duty and penalty amounts and stayed their recovery during the appeal's pendency.In conclusion, the Tribunal addressed the issues of duty exemption under Notification No. 202/88, the nature of purchased materials, and the deposit requirement for appeal hearings. The decision balanced the arguments presented by both sides, emphasizing the need for further examination during regular hearings while ensuring compliance with deposit requirements to proceed with the appeals.
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