Pre-deposit waiver for excise duty and penalty upheld on a prima facie case over garment classification under central excise rules.

Waiver of pre-deposit was sought against duty and equal penalty demands arising from ready-made garments and tailoring activity. The applicant argued that garments classifiable under Chapters 61 or 62 were not liable to central excise duty under Rule 4(3) of the Central Excise Rules, 2001. On a prima facie assessment, the Tribunal found a strong case for interim relief. Pre-deposit of duty and penalty was waived, and recovery was stayed during the pendency of the appeal.

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Issues: Whether pre-deposit of the demanded duty and equal penalty should be waived and recovery stayed during the pendency of the appeal.

Analysis: The application concerned waiver of pre-deposit of duty and penalty arising from demands relating to ready-made garments and tailoring activity. The applicant relied on Rule 4(3) of the Central Excise Rules, 2001 and contended that garments falling under Chapter 61 or 62 were not liable to central excise duty under that rule. On a prima facie assessment, the Tribunal found that the applicant had a strong case for interim relief.

Conclusion: Pre-deposit of duty and penalty was waived and recovery was stayed during the pendency of the appeal, in favour of the assessee.

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