Prima facie denial of natural justice supported complete waiver of pre-deposit and stay of recovery in duty dispute.

Waiver of pre-deposit and stay pending appeal were justified where the duty demand rested mainly on a transporter's statement, while the applicants' stock and records showed no discrepancy and no enquiry had been made with the actual manufacturers or suppliers. Refusal of cross-examination at the adjudication stage raised a prima facie issue of denial of natural justice, and the record did not clearly establish suppression by the applicants. The penalties also lacked supporting findings. On this material, a strong prima facie case was made out for complete waiver of pre-deposit and stay of recovery pending appeal.

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Issues: Whether the applicants were entitled to waiver of pre-deposit and stay of recovery of duty and penalties pending appeal, in view of the prima facie challenge to the demand, the denial of cross-examination, and the plea of limitation.

Analysis: The demand rested mainly on the statement of one transporter, while the applicants' stock and records showed no discrepancy. Cross-examination of the transporter was refused at the adjudication stage, which raised a prima facie issue of denial of natural justice. The demand also appeared doubtful because no enquiry had been made with the actual manufacturers or suppliers of the molasses, and the material did not clearly establish suppression by the applicants. On the available record, the penalties also lacked supporting findings.

Conclusion: The applicants made out a strong prima facie case and were entitled to complete waiver of pre-deposit and stay of recovery pending appeal.

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