Drawback classification dispute: test report supported a prima facie case for waiver of pre-deposit and stay of recovery.

The drawback dispute turned on whether the exported goods matched the goods described in the drawback schedule. On the materials before CESTAT, including the test report, the samples appeared to be heat resistant tension tape because they retained their elongation under fixed force at the relevant temperature. That factual indication was sufficient at the interim stage to show a strong prima facie case on merits, supporting waiver of pre-deposit of duty and penalty and stay of recovery pending the appeals.

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Issues: Whether the applicants had made out a strong prima facie case for waiver of pre-deposit of duty and penalty and for stay of recovery pending appeal.

Analysis: The drawback claim had been disallowed on the premise that the exported goods were not the goods covered by the drawback schedule. On the materials placed, including the test report, the goods appeared to be heat resistant tension tape, since the samples retained their physical property of elongation under fixed force at a particular temperature. This was sufficient at the interim stage to indicate a strong case on merits.

Conclusion: The applicants were entitled to waiver of pre-deposit of duty and penalty and to stay of recovery pending the appeals.

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