Duty-free import exemption and wastage norms supported a prima facie case for waiver of pre-deposit and stay of recovery.

Duty-free import under the exemption notification was not made conditional on strict compliance with the wastage norm, because the notification only regulated the clearance of scrap or waste arising in manufacture. The absence of a specific link between the wastage norm and the exemption benefit supported the applicants' case at the interim stage, and they were held to have established a prima facie case for waiver of pre-deposit and stay of recovery without conditions.

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Issues: Whether the applicants had made out a prima facie case for waiver of pre-deposit and stay of recovery in respect of the duty and penalty demand arising from alleged excess generation of waste under the import exemption notification.

Analysis: The imported raw materials were covered by the exemption notification permitting duty-free import for manufacture of export goods. The notification contemplated that scrap or waste may arise during manufacture and regulated its clearance, but did not make compliance with the waste norm a condition precedent to the availability of the exemption. The Tribunal also noted that the absence of a specific linkage between the wastage norms and the benefit of the notification supported the applicants' contention at the interim stage. In the circumstances, the applicants were found to have established a prima facie case.

Conclusion: The applicants were entitled to waiver of pre-deposit and stay of recovery without any conditions.

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