Captive consumption and pre-deposit waiver: unsupported BIFR plea did not justify complete waiver, but partial stay was granted.

Excise duty on goods manufactured and captively consumed was treated as supportable under the excise scheme, even though the assessee argued the item was only an intermediate product used in manufacture and not independently dutiable. The plea for complete waiver of pre-deposit based on pending BIFR proceedings was rejected because it was not supported by evidence. Partial waiver was nevertheless granted, subject to deposit of a specified sum, and recovery of the remaining duty and penalty was stayed on compliance.

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Issues: Whether waiver of pre-deposit could be granted in respect of demand of duty and penalty on goods manufactured and captively consumed, and whether the plea based on pending BIFR proceedings warranted complete waiver.

Analysis: The demand arose from the finding that the product was manufactured and cleared under a different description, while the stay plea proceeded on the footing that the product was only an intermediate used in manufacture and therefore not dutiable. The demand of duty on goods used in the manufacturing process was held to be supported by the scheme of excise law governing goods captively consumed. The plea regarding pendency before the Board for Industrial and Financial Reconstruction was not supported by evidence and was not accepted as a ground for total waiver.

Conclusion: Partial waiver of pre-deposit was granted. The assessee was directed to deposit a specified sum, and recovery of the balance duty and penalty was stayed on such deposit.

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