Prima facie classification of vitamin preparations justified waiver of pre-deposit and stay of duty recovery pending appeal.

Classification of vitamins in measured doses or retail packing was treated as prima facie outside Chapter 29 and capable of falling under Chapter 30 as a therapeutic or prophylactic preparation under the tariff scheme and HSN notes. The Tribunal also noted, prima facie, that repacking vitamins in capsules did not clearly create a higher duty liability on the facts presented. On that basis, the balance of convenience favoured protection from recovery pending appeal, and waiver of pre-deposit with stay of duty recovery was granted.

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Issues: Whether the applicant was entitled to waiver of pre-deposit of duty and stay of recovery pending disposal of the appeal.

Analysis: The product was prima facie found to have a strong claim for classification as a therapeutic or prophylactic preparation under Chapter 30, since vitamins put up in measured doses or retail packing are excluded from the vitamin heading in Chapter 29 by the scheme of the tariff and the HSN notes. The Tribunal also noted, prima facie, that the activity of repacking vitamins in capsules did not give rise to a larger duty liability in the circumstances urged. In that view, the balance of convenience favoured protection against recovery pending appeal.

Conclusion: Waiver of pre-deposit was granted and recovery of duty was stayed.

Ratio Decidendi: Where the assessee shows a strong prima facie case on classification and the duty demand is also doubtful on the question of manufacture, pre-deposit may be waived and recovery stayed pending appeal.

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