Limitation defence and departmental prior knowledge justified waiver of pre-deposit and stay of recovery pending appeal

Prior departmental awareness of the basis on which duty was quantified supported a prima facie limitation defence, and that defence justified interim protection during the appeal. The Tribunal noted earlier meeting minutes and departmental communications indicating knowledge of the relevant valuation or demand basis, and treated the appellant's partial payment as relevant to interim relief. On that footing, the remaining duty, penalty and interest were waived for purposes of the appeal, and recovery was stayed pending final disposal.

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Issues: Whether the appellant was entitled to waiver of the remaining duty amount, penalty and interest during the pendency of the appeal on the ground of limitation.

Analysis: The Department's knowledge of the basis on which cess had been paid was indicated by the 1986 meeting minutes, later communicated to the department, and by departmental communications showing demand on the quantity received at the refinery head. In that background, the Tribunal formed a prima facie view that the appellant had a strong limitation defence. Taking note of the partial payment already made, the Tribunal considered it appropriate to grant interim protection pending disposal of the appeal.

Conclusion: The remaining duty adjudicated by the authority, along with penalty and interest, was waived for the purpose of the appeal and collection thereof was stayed during the pendency of the proceedings.

Final Conclusion: The appellant obtained interim relief against further recovery, but the appeal itself remained pending for final hearing.

Ratio Decidendi: Where the record shows prior departmental awareness of the valuation or quantification basis, a prima facie limitation defence can justify waiver of pre-deposit and stay of recovery pending appeal.

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