Prima facie case for waiver of pre-deposit found where clandestine removal evidence was weak and partly retracted.

In a stay application arising from demands for clandestine manufacture and removal of chewing tobacco, the Tribunal held that the appellants had shown a strong prima facie case for waiver of pre-deposit. It noted that much of the oral evidence had been retracted, the transport documents did not satisfactorily prove excess receipt of raw tobacco or consistent consignee details, and several documents lacked proof of delivery. The evidence also did not prima facie establish clandestine clearance of finished goods, and a significant part of the demand rested on a statement not shown to be part of the relied-upon material in the notice. Waiver of pre-deposit was granted and recovery of duty and penalties was stayed pending appeal.

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

Analysis: The applications arose from a demand of duty and penalties confirmed on allegations of clandestine manufacture and removal of chewing tobacco, with penalties also imposed on various connected persons under the excise provisions. The Tribunal examined the material relied upon by the department and found that much of the oral evidence had been retracted. The transport documents did not satisfactorily establish receipt of excess raw tobacco by the main appellant, did not consistently identify it as consignee, and in several instances lacked acknowledgement of delivery. The evidence also did not prima facie establish clandestine clearance of finished goods. A substantial part of the demand rested on a statement that was not shown to have formed part of the relied upon documents in the show cause notice. On that material, the appellants demonstrated a strong prima facie case.

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

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