Tariff classification and pre-deposit relief turn on prima facie exclusion under Section XVI and proof of financial hardship.

A stay application in a tariff classification dispute examined whether a power supply unit for tanks should fall under Heading 85.36 or be treated as parts of tanks under Heading 87.10. The note to Section XVI was applied to indicate that electrical machinery and equipment are excluded from Chapter 87 treatment even if identifiable for such goods, so the claimed Chapter 87 classification was not prima facie acceptable. Financial hardship was also not established by supporting material. Conditional relief was therefore granted: part of the pre-deposit was required, with the balance waived and recovery stayed on compliance.

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Issues: Whether the appellant was entitled to waiver of pre-deposit and stay of recovery pending appeal, and whether a prima facie case was made out against the proposed classification under Heading 85.36 rather than Heading 87.10.

Analysis: The duty demand arose from the Department's view that the power supply unit for tanks was classifiable as apparatus for switching or protecting electrical circuits under Heading 85.36, while the appellant claimed it as parts of tanks under Heading 87.10. On a prima facie view, the claimed classification under Chapter 87 was not acceptable because Note 2(f) to Section XVI excludes electrical machinery and equipment from treatment as parts or accessories of Chapter 87 goods, even if identifiable for such goods. The claim of financial hardship was also unsupported by evidence.

Conclusion: The appellant was directed to deposit Rs. 80,000 within one month, and on such deposit the balance duty deposit was waived and recovery of the remaining demand stayed.

Final Conclusion: The application for stay was allowed only in part, with conditional relief granted against the disputed duty demand.

Ratio Decidendi: For waiver of pre-deposit, the applicant must show a prima facie case and supporting material for financial hardship; where the goods are prima facie excluded by the tariff note from the claimed chapter, full waiver is not justified.

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