Prima facie limitation and excisability concerns supported full waiver of pre-deposit and stay of recovery in duty dispute.

A prima facie time-bar under Section 11A and a weak excisability case justified full waiver of pre-deposit and stay of recovery. The applicants challenged a duty demand on waste and scrap cleared over a long period, contending that much of it fell outside the normal limitation period. They also argued that the show-cause allegation of suppression rested on non-declaration of paper waste/broke, while the adjudication proceeded on a different basis. On merits, they maintained that waste and scrap arising from dismantling machinery was not excisable scrap. The record was found to disclose a strong prima facie case on both limitation and merits.

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Issues: Whether the applicants were entitled to full waiver of pre-deposit and stay of recovery on the ground that the demand appeared prima facie time-barred and unsustainable on merits.

Analysis: The duty demand related to waste and scrap cleared over a substantial period, and the applicants contended that a major part of the demand was beyond the normal limitation period under Section 11A. It was also noted that the allegation in the show-cause notice regarding suppression was directed at non-declaration of paper waste/broke under Rule 173B, whereas the adjudication proceeded on a different basis. On merits, the applicants relied on the view that waste and scrap arising from dismantling machinery was not the kind of scrap liable to excise duty. In the circumstances, the record disclosed a strong prima facie case both on limitation and on the merits of excisability.

Conclusion: Full waiver of pre-deposit and stay of recovery were granted in favour of the applicants, and the appeal was directed to be listed for regular hearing.

Ratio Decidendi: Where the demand and the basis of suppression are prima facie vulnerable on limitation and on merits, full waiver of pre-deposit and stay of recovery may be granted pending final hearing.

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