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2003 (12) TMI 540 - AT - Central Excise
Issues:
1. Application for waiver of pre-deposit of duty and penalty. 2. Interpretation of Notification No. 67/95-C.E. 3. Use of components in the manufacture of dutiable products. 4. Claim of exemption based on damaged/rejected products. 5. Prima facie case for waiver of duty and penalty. Analysis: 1. The case involved four applications by a company for the waiver of pre-deposit of duty amounting to Rs. 2,34,820/- and penalty of Rs. 17,000/-. 2. The appellant contended that they manufactured components used in the production of dry battery cells, availing exemption under Notification No. 67/95-C.E. The duty and penalty were imposed on components used in the manufacture of dry battery cells that were rejected or damaged during the manufacturing process. The appellant argued that they had already paid duty on waste generated from damaged cells and the components were used in the production of dutiable dry battery cells, fulfilling the conditions of the Notification. Reference was made to the decision in Hindustan Petroleum Corporation Ltd. v. C.C.E., 2000 (124) E.L.T. 323 (T). 3. The respondent, on the other hand, emphasized that the components on which duty was not paid did not result in the production of dutiable products as the dry battery cells were rejected or damaged. 4. The Tribunal acknowledged that dry battery cells were not exempt from duty and the components produced by the appellant were used in the manufacturing of dutiable dry battery cells. It was recognized that some batteries might get damaged or rejected during the manufacturing process. Consequently, the Tribunal found a strong prima facie case in favor of the appellant and stayed the recovery of the duty and penalty pending the appeal hearing scheduled for 10-2-2004. This detailed analysis of the judgment highlights the issues raised, arguments presented by both parties, relevant legal provisions, and the Tribunal's decision to grant a stay on the recovery of duty and penalty pending the appeal hearing.
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