Prima facie case for pre-deposit waiver failed where exemption claim for vacuum cleaners was not shown to be strong.

CEGAT, Mumbai considered whether the appellants had made out a prima facie case for complete waiver of pre-deposit and stay of recovery after denial of exemption under Notification No. 1/95. The Tribunal distinguished the earlier decision relied upon by the appellants because that case turned on the absence of a show-cause allegation on the scope of the exemption entry, whereas the impugned order had specifically found that vacuum cleaners supplied to a 100% export-oriented unit were used only for cleaning the factory and not for manufacture or packing of articles. On that basis, the Tribunal held that a strong prima facie case for total waiver was not established, but partial relief was justified.

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Issues: Whether the appellants had made out a sufficient prima facie case for complete waiver of pre-deposit and stay of recovery in respect of duty demand arising from denial of exemption under Notification No. 1/95.

Analysis: The Tribunal noted that the reliance placed on an earlier decision did not govern the present dispute, as that case turned on absence of a show cause notice allegation regarding the scope of the expression used in the exemption entry. The impugned order had separately considered why vacuum cleaners supplied to a 100% export oriented unit were not covered by the notification because they were used only for cleaning factory and not for manufacture or packing of articles. In view of this distinction, the Tribunal held that the applicants had not shown a strong prima facie case for total waiver, though partial relief was warranted.

Conclusion: Complete waiver of pre-deposit was declined, but partial waiver was granted on condition of depositing Rs. 50,000, with the balance duty stayed pending the appeals.

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