Limitation and suppression dispute: prior departmental knowledge justified waiver of pre-deposit and stay of recovery pending appeal.

A limitation objection was found prima facie strong where the department had already issued earlier show cause notices for the same period and facts, weakening any allegation of suppression. On that basis, the tribunal treated the demand as time-barred at the interim stage and held that pre-deposit of duty and penalty was not justified. Recovery was stayed pending appeal, and the assessee obtained interim relief without deposit requirements because prior departmental knowledge of the relevant facts undercut the later suppression plea.

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Issues: (i) Whether the demand was barred by limitation and whether, on that ground, pre-deposit of duty and penalty should be waived and recovery stayed pending appeal.

Analysis: The same factual foundation had already been the subject of earlier show cause notices issued in 1995 for the same period. In view of those notices, the allegation in the later notice that the assessee had suppressed facts lacked prima facie merit. The existence of departmental knowledge of the relevant facts weakened the plea against the assessee at the stage of considering stay and waiver.

Conclusion: The limitation objection was accepted prima facie and the requirement of pre-deposit of duty and penalty was waived, with recovery stayed during the pendency of the appeal.

Final Conclusion: Interim relief was granted to the assessee on the ground of limitation, leaving the appeal to proceed without pre-deposit and with recovery suspended.

Ratio Decidendi: Where the department was already aware of the relevant facts through earlier notices, a subsequent allegation of suppression for the same period did not justify insisting on pre-deposit and recovery at the interim stage.

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