Classification dispute and captive consumption benefit supported waiver of pre-deposit and stay of duty recovery.

LPG bodies were prima facie treated as classifiable against the applicants in light of the Tribunal's earlier view, but the Revenue's own show cause notice suggested clearance of bodies mounted on chassis with running gear under a different Chapter 87 sub-heading. On that basis, the applicants' claim to captive consumption benefit under Notification No. 217/86-C.E. was found to have prima facie substance. A prima facie case for waiver of pre-deposit was therefore made out, and recovery of duty and penalty was stayed pending appeal.

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Issues: Whether the applicants made out a prima facie case for waiver of pre-deposit and stay of recovery in respect of the duty and penalty demand, in the context of the classification dispute and the claim to captive consumption benefit under Notification No. 217/86-C.E.

Analysis: The item in dispute, LPG bodies, was prima facie treated as classifiable against the applicants in view of the Tribunal's earlier decision. However, the revenue's own stand in the show cause notice indicated clearance of bodies mounted on chassis with running gear, suggesting a final product under another sub-heading of Chapter 87. On that footing, the claim that the applicants could prima facie avail the benefit of captive consumption under Notification No. 217/86-C.E. was found to have substance.

Conclusion: A prima facie case for waiver of pre-deposit was made out, and recovery of duty and penalty was stayed pending the appeal.

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