2011 (2) TMI 1160 - AT - Central Excise

Waiver of pre-deposit - whether appellants have wrongly availed Notification No. 6/2002-C.E., dated 1-3-2002 and successor Notification No. 5/2006-C.E., dated 1-3-2006 - It is explained that the total weight of fly-ash or phospho-gypsum received and consumed in the factory for production of final products at the Thimmapur unit is less than 25% of the weight of the final products - Held that - Revenue has no case that the assessee has not maintained account in the manner prescribed by the jurisdictional Commissioner of Central Excise for receipt and use of fly-ash or phospho-gypsum in the manufacture of the finished goods falling under Chapter 68 of the Tariff and that it has not filed monthly returns as specified by the Commissioner of Central Excise, with the Deputy Commissioner or the Assistant Commissioner of Central Excise, as the case may be, in charge of the unit at Thimmapur - Decided in favor of the assessee

Summary

Issues:
Waiver of pre-deposit of demand under Notification No. 6/2002-C.E. and successor Notification No. 5/2006-C.E. for exemption wrongly availed by appellants, applicable interest, and penalty.

Analysis:
The appellant sought waiver of pre-deposit of a demand amounting to Rs. 5,06,39,771/- for exemption wrongly availed under specific notifications. The dispute pertained to the period from 1-4-2004 to 31-12-2008. The appellant claimed that their finished goods contained not less than 25% by weight of fly-ash or phospho-gypsum as required by the Notifications, emphasizing the use of these materials in their manufacturing process at different units. The Revenue contended that the total quantity of fly-ash or phospho-gypsum used at one of the units was less than 25% of the weight of the final products, rendering them ineligible for the exemption.

The Tribunal examined the Notifications providing exemption for goods using a minimum percentage of fly-ash or phospho-gypsum. It was observed that both the FOB and additional input slurry used by the appellant met the required threshold of 25% by weight. The condition for exemption mandated maintaining proper accounts and filing monthly returns as specified by the Commissioner of Central Excise, which the appellant had complied with. The Tribunal noted that the Revenue did not dispute the maintenance of accounts or filing of returns as per the prescribed manner. Therefore, since the goods cleared by the appellant satisfied the conditions for exemption, the Tribunal ordered a complete waiver of the pre-deposit of the demand, interest, and penalty until the appeal's final decision.

In conclusion, the Tribunal granted the appellant's request for waiver of pre-deposit based on the compliance with the conditions specified in the Notifications, emphasizing the importance of maintaining proper accounts and filing returns as prescribed by the Commissioner of Central Excise. The decision highlighted the significance of meeting the criteria for exemption to avail the benefits under the relevant notifications, ultimately leading to the grant of the waiver pending the appeal's outcome.