Prima facie case and disclosure defeat suppression plea, leading to waiver of pre-deposit and interim protection.

CESTAT granted full interim relief in a dispute over cutting and slitting jumbo rolls into paper rolls, holding that the applicants had made out a strong prima facie case for waiver of pre-deposit of duty and penalty. The record showed that the activity had long been within Revenue's knowledge, declarations had been filed, and earlier correspondence treated the goods as stationery, so insistence on full pre-deposit was not justified at the stay stage. The tribunal also found that suppression of facts and prima facie invocation of the extended period of limitation were not established on the available material, and the appeal was directed to proceed for further hearing.

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Issues: (i) Whether the applicants had made out a prima facie case for waiver of pre-deposit of duty and penalty in a dispute concerning cutting and slitting of jumbo rolls into various paper rolls. (ii) Whether, for the purpose of interim relief, suppression of facts and invocation of the extended period of limitation were prima facie made out.

Issue (i): Whether the applicants had made out a prima facie case for waiver of pre-deposit of duty and penalty in a dispute concerning cutting and slitting of jumbo rolls into various paper rolls.

Analysis: The activity had been in the Revenue's knowledge for years, declarations had been filed under the excise rules, and the record indicated that the goods had been treated as articles of stationery in earlier correspondence. In that background, the applicants showed a strong prima facie case for interim protection, and the dispute over classification and exemption could not justify insistence on full pre-deposit at that stage.

Conclusion: Waiver of the whole of the duty and penalty pre-deposit was granted, and the stay application succeeded.

Issue (ii): Whether, for the purpose of interim relief, suppression of facts and invocation of the extended period of limitation were prima facie made out.

Analysis: The Revenue's prior knowledge of the manufacturing activity, the earlier writ proceedings, the declarations filed by the applicants, and the absence of concealment undermined a prima facie allegation of suppression. On that footing, the extended period did not appear prima facie sustainable at the stay stage.

Conclusion: Suppression and extended limitation were not prima facie established for the purpose of denying stay.

Final Conclusion: Interim relief was granted in full, and the appeal was directed to be listed for further hearing.

Ratio Decidendi: Where the Revenue already had knowledge of the activity and the assessee had made disclosures in declarations and prior proceedings, a strong prima facie case exists for waiver of pre-deposit and the allegation of suppression for invoking the extended period is not made out at the interim stage.

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