Exemption for Defence supplies routed through a sister unit was held prima facie available, supporting waiver and stay.

Clearances routed through a sister unit or job worker to the Ministry of Defence were treated as prima facie eligible for exemption under Notification No. 63/95-C.E., because the goods were admittedly ultimately supplied to that Ministry. The direct-clearance objection was not accepted as a basis to deny the exemption at the interim stage, and the matter was found prima facie in favour of the appellant. On that basis, waiver of pre-deposit was granted and recovery was stayed pending disposal of the appeal.

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Issues: Whether, for the purpose of waiver of pre-deposit and stay of recovery, clearances made through a sister unit or job worker to the Ministry of Defence were prima facie eligible for exemption under Notification No. 63/95-C.E. dated 16-3-1995.

Analysis: The goods were admittedly ultimately supplied to the Ministry of Defence, though routed through a sister unit. On the authorities cited and the facts placed, such routed supply was treated as supply made to the Ministry of Defence for the purpose of the exemption notification. The direct-clearance objection was not accepted as a ground to deny the benefit at the interim stage, and the case was found to be prima facie in favour of the appellant.

Conclusion: Waiver of pre-deposit was granted and recovery was stayed pending disposal of the appeal.

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