Waiver of pre-deposit and stay on prima facie job work compliance under Rule 57F(3) and Notification 214/86

A prima facie case for waiver of pre-deposit and stay of recovery was made out where steel was received for job work and semi-finished dies were returned under Rule 57F(3) challans with the benefit of Notification No. 214/86-C.E., pursuant to approval by excise authorities. The commentary notes that, if the activity was in fact not permissible under the rule, the facility should first have been withdrawn and any duty demanded from the principal manufacturer. For the limited purpose of stay, the lower authorities' orders were therefore considered misplaced, and recovery was stayed pending disposal of the appeal.

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

Analysis: The appellants were receiving steel on job work basis and returning semi-finished dies under Rule 57F(3) challans with the benefit of Notification No. 214/86-C.E. The arrangement had been undertaken with the approval of the excise authorities. On a prima facie view, if the activity was not permissible under the rule, the facility ought to have been withdrawn first and the duty, if any, demanded from the principal manufacturer. The orders of the lower authorities therefore appeared misplaced for the limited purpose of stay.

Conclusion: The appellants made out a prima facie case for waiver of pre-deposit of duty and penalty, and recovery was stayed till disposal of the appeal.

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