Prima facie case on merits and limitation justified stay of excise duty and penalty recovery pending appeal.

A pre-deposit waiver and stay of recovery were granted in a central excise dispute concerning classification of conveyor systems and related parts. The Tribunal found that the appellant had raised a substantial prima facie case on both merits and limitation, which justified protection against coercive recovery while the appeal was pending. On that basis, recovery of the disputed duty and penalties was stayed during the pendency of the appeal.

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Issues: Whether the appellant had made out a prima facie case for waiver of pre-deposit and stay of recovery of the demanded duty and penalties during the pendency of the appeal.

Analysis: The application concerned demand of central excise duty and penalties arising from the classification of conveyor systems and parts thereof. On the material placed, the Tribunal found that the appellant had raised a substantial prima facie case both on merits and on limitation. In view of that finding, the Tribunal considered it appropriate to protect the appellant from coercive recovery while the appeal remained pending.

Conclusion: Recovery of the entire amount of duty and penalty was stayed during the pendency of the appeal.

Ratio Decidendi: Where a substantial prima facie case is shown on both merits and limitation, recovery of the disputed excise demand and penalties may be stayed pending appeal.

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