ORDER
S.L. Peeran, Member, (J)
1. For the purpose of hearing this appeal the appellant is required to pre-deposit duty amount of Rs. 1,02,375/- and penalty of Rs. 5,000/- imposed by the Commissioner,
2. The brief facts, discussed in the impugned order are that the appellants are manufacturers of Cotton yarn and Polyester cotton blended yarn falling under Chapter Headings 52 and 55 of the CTA respectively. They had cleared polyester fibre waste under Rule 57F(4) Challans to their (C) unit. Further, on investigation the department recorded the statement of their Manager who deposed that they had cleared polyester fibre waste generated out of the polyester stable fibres on which Modvat credit had been availed. The Revenue took the view that the item is “waste” and it should have been removed under Rule 57F(18) by paying duty and they had wrongly taken Modvat credit. It is the contention of the appellants that what was cleared was only fibre “waste” which is not “waste” of the final product. For discharging duty, the item “fibre waste” is technically called “Polyester”. To substantiate their case they had produced test result and reports from SITRA. It is their contention that these reports and technical opinion have not been considered by both the lower authorities. The Id. Counsel submits that as it is not a speaking order and no findings have been recorded on the material evidence filed and therefore the matter is required to be remanded back for de novo consideration. He also submits that the statement of Shri C. Damoda-rasamy. Manager of the appellants on which the case is built up is not condu-sive and there is no admission of “waste” as such. He further submits that the appellant company is incurred a huge loss to an extent of Rs. 3 crores. They have filed an application before the BIFR for declaring their units as sick unit. He submits that their application has been registered before the BIFR and the proceedings have commenced but final order has not yet been passed. He produced a copy of the letter received by the appellants from the Registrar of BIFR in case No. 434/2001. He submits that in a similar situation, the Tribunal has granted waiver of pre-deposit to sick units registered under BIFR in the case of Khabros Steel India Ltd. v. CCE, Jaipur reported in 2001 (135) E.L.T. 545 (T) and in the case of Navpad Textiles Inds. Ltd. v. CCE reported in 2001 (135) E.L.T. 641 (T).
3. Appearing on behalf of the Revenue the Id. SDK opposed the prayer. He submits that the appellants are required to have cleared the “waste” under Rule 57F(18) by paying the duty. On a specific query from the Bench as to whether the Department has any say on the appellant’s evidence with regard to SITRA’s report, the Id. SDR submits that there is no reference to this evidence in both the orders. However, he submits that the Commissioner has sent a report and comments in which he has mentioned that these reports are not significant to consider it as the fibres cleared were “waste” as shown in their invoices. He submits that they are only registered under BIFR and they have not been declared as a sick unit and hence they should be put to terms.
4. Heard both sides. On a careful consideration of the entire records we notice that the appellants had produced test results of SITRA vide report dated 28-9-99. They have also produced opinion of the SITRA. There is no reference to these evidences in the impugned order. However, during the personal hearing, they made a submission that there is difference between “fibre waste” and “waste”. In order to establish that the item was waste and it is dutiable and marketable as a waste. Revenue ought to have produced the evidence in this regard or should have looked into the evidence produced by the appellants. Prima facie there is a violation of principle of natural justice. In view of this, we grant waiver of the pre-deposit and stay its recovery.
5. As the issue lies in a short compas, the appeal is required to be remanded back to the original authorities to reconsider the issue in the light of the appellant’s evidence. The Revenue is at liberty to draw samples and get it tested from their Chief Chemist and also produce the evidence of trade enquiries on the products as to whether it is a “fibre waste” or “waste”. The appellants shall be given an opportunity to file their reply. The authorities shall reconsider the matter afresh and pass a speaking order. Appeal is allowed by way of remand to the original authority.