Exemption notification benefit cannot be denied merely because inputs were exempt or carried nil duty, with pre-deposit waived.

An exemption under Notification No. 208/83 could not be denied solely because the rerollable inputs used in producing mild steel bars had themselves been exempted or attracted nil duty under another notification. The Tribunal treated the issue as prima facie covered by an earlier decision holding that the notification did not require payment of a specific duty on inputs and that nil duty could satisfy the condition. On that basis, the assessee obtained waiver of pre-deposit, and the appeal was remanded to the Commissioner (Appeals) for disposal on merits without insisting on any deposit.

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Issues: Whether the assessee was entitled to waiver of pre-deposit and whether the appeal should be remanded for decision on merits.

Analysis: The demand arose from clearance of mild steel bars under Notification No. 208/83. The denial of the notification benefit rested on the ground that the rerollable material used as input had itself been exempted under Notification No. 386/86. The Tribunal noted that a prior decision had held that benefit under Notification No. 208/83 could not be denied merely because no duty had been paid on the inputs, since the notification did not require payment of a specific duty on inputs and nil duty could still amount to payment of duty for this purpose. On that basis, the matter was treated as prima facie covered by the earlier view.

Conclusion: The assessee was entitled to waiver of pre-deposit, and the appeal was remanded to the Commissioner (Appeals) for disposal on merits without insisting on any deposit.

Final Conclusion: The order granted interim relief to the assessee and sent the matter back for fresh adjudication on the substantive dispute.

Ratio Decidendi: Where the exemption notification does not require payment of a specific duty on inputs, denial of the notification benefit cannot rest solely on the ground that the inputs were exempt or subjected to nil duty.

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