Job worker valuation dispute justified waiver of pre-deposit and stay of recovery pending appeal.

Waiver of pre-deposit and stay of recovery were granted where the valuation adopted by the job worker was prima facie supportable and the applicability of the valuation rule remained disputed. The demand had been raised on the premise that the unit was not an independent job worker, but no finding had yet been made that it was merely hired labour. On that basis, the cost-plus valuation method was treated as prima facie correct, which justified protection against recovery pending disposal of the appeals. The applications were allowed, and pre-deposit of duty and penalties was waived.

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Issues: Whether pre-deposit of duty and penalties should be waived and recovery stayed pending appeal where the valuation adopted by the job worker was prima facie supportable and the applicability of the valuation rule was in dispute.

Analysis: The demand was raised by applying the valuation rule on the premise that the job worker was not an independent job worker. In the absence of a finding that the unit was merely hired labour and not an independent job worker, the valuation adopted on the basis of the cost-plus formula was treated as prima facie correct. This was sufficient to justify waiver of pre-deposit and protection against recovery pending disposal of the appeals.

Conclusion: The applications were allowed and pre-deposit of duty and penalties was waived with recovery stayed during the pendency of the appeals.

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