Prima facie stay on duty recovery where imported inputs had already suffered countervailing duty and credit issues were in dispute.

Imported inputs that had suffered countervailing duty at the rate applicable to motor vehicles were later cleared to vendors at the same duty rate. On the interim application, the Tribunal considered the cited decisions on credit treatment and the effect of removal of inputs, and found that those authorities supported the applicants at the prima facie stage. A strong prima facie case for stay of recovery of the demanded duty and penalty was therefore made out, and recovery was stayed.

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Issues: Whether the applicants had made out a prima facie case for stay of recovery of the demanded duty and penalty.

Analysis: The inputs imported by Maruti Udyog Ltd. had suffered countervailing duty at the rate applicable to motor vehicles under Heading 87.03, and the same duty rate was applied when the inputs were cleared to the vendors. The controversy on the correct treatment of credit and the effect of removal of inputs was considered in the light of the cited Tribunal decisions, and the applicants' reliance on those decisions was treated as sufficient at the interim stage. On that basis, the Tribunal found that the applicants had shown a strong prima facie case for interim protection against recovery.

Conclusion: A prima facie case for stay of recovery of the entire duty and penalty was made out, and the recovery was stayed.

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