Exemption notification precedent supported waiver of pre-deposit and stay of excise recovery pending appeal.

A binding High Court interpretation of Notification No. 202/88-C.E. supported the appellant's claim that M.S. bars made from rollable or re-rollable material, including old and discarded railway scrap, were eligible for exemption. That precedent was treated as creating a strong prima facie case on the merits, and interim protection followed: waiver of pre-deposit was granted and recovery of the confirmed central excise duty and equal penalty was stayed pending disposal of the appeal.

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Issues: Whether, pending appeal, the appellant was entitled to waiver of pre-deposit and stay of recovery of the confirmed central excise duty and equal penalty in view of the exemption notification and the binding High Court decision.

Analysis: The claim for exemption under Notification No. 202/88-C.E. was supported by the Allahabad High Court's ruling that benefit of the notification is not deniable to M.S. bars manufactured from rollable or re-rollable material such as old and discarded rails, wheels and fish plates purchased from Railways. In light of that decision, the appellant was found to have established a strong prima facie case for interim relief during the pendency of the appeal.

Conclusion: The appellant was entitled to waiver of pre-deposit and stay of recovery of the duty and penalty during the pendency of the appeal.

Final Conclusion: Interim protection was granted and recovery of the disputed duty and penalty was kept in abeyance until disposal of the appeal.

Ratio Decidendi: A binding precedent on the scope of an exemption notification can furnish a strong prima facie case justifying waiver of pre-deposit and stay of recovery pending appeal.

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