Prima facie exemption under Notification 67/95-C.E. justified unconditional waiver of pre-deposit and stay of recovery.

In stay proceedings, a prima facie claim to exemption under Notification No. 67/95-C.E. supported unconditional waiver of pre-deposit and stay of recovery. The tribunal treated the underlying manufacture issue as requiring full examination at the regular hearing, but for interim relief it accepted that, if the activity resulted in an excisable commodity, the exemption plea had prima facie force. Relying on its earlier view that the disputed period was covered by the notification, it found a prima facie case in favour of the applicants and granted stay relief.

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Issues: Whether the appellants were entitled to unconditional waiver of pre-deposit and stay of recovery proceedings in the light of a prima facie claim to exemption under Notification No. 67/95-C.E. dated 16-3-1995.

Analysis: The question whether the activity amounted to manufacture was treated as a matter for detailed examination at the stage of regular hearing. For the purpose of the stay applications, the Court found that once the activity was assumed to result in an excisable commodity, there was prima facie force in the plea that the benefit of Notification No. 67/95-C.E. could not be denied. Reliance was placed on the earlier view of the same Bench holding that the period in dispute was covered by the notification and that the assessee was entitled to its benefit. On that basis, a prima facie case in favour of the applicants was made out.

Conclusion: The applicants were entitled to unconditional waiver of pre-deposit and stay of recovery proceedings.

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