Utilisation of Additional Excise Duty credit supported a prima facie case, leading to waiver of pre-deposit and stay of recovery.

Credit of Additional Excise Duty could be utilised against excise duty where the governing rule permitted such set-off, and the later amendment relied on by the Revenue did not alter the position on the admitted facts. Because the duty had been paid and the credit utilised in the same month, and the liability issue was already under challenge, the applicants established a strong prima facie case for interim protection. On that basis, pre-deposit of the duty demand was waived and recovery was stayed during pendency of the appeal.

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Issues: Whether the applicants had made out a prima facie case for waiver of pre-deposit and stay of recovery in respect of the duty demand arising from utilisation of credit of Additional Excise Duty.

Analysis: The applicants had paid the Additional Excise Duty in January 2004 and utilised the credit in the same month. The governing rule permitted utilisation of credit of such duty towards excise duty, and the amendment relied upon by the Revenue did not displace the applicants' position on the admitted facts. The applicants also had a pending challenge regarding the liability itself, and the Revenue had not objected to the position that credit had been taken. On these facts, a strong prima facie case was made out for interim relief.

Conclusion: The pre-deposit of the duty amount was waived and recovery of the amount was stayed during the pendency of the appeal.

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