Limitation and absence of suppression justified unconditional waiver of pre-deposit and stay of recovery in a duty dispute.

Long-standing sampling activity carried out with departmental knowledge, supported by registers, correspondence, inspections and earlier litigation, did not prima facie justify allegations of suppression, misrepresentation or fraud with intent to evade duty. On the limitation issue, the demand was treated as strongly arguable as time-barred because the department should have raised it earlier rather than await finality on the legal question. On that basis, unconditional waiver of pre-deposit and stay of recovery were granted pending disposal of the appeal.

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Issues: Whether the applicants were entitled to unconditional waiver of pre-deposit and stay of recovery on the ground that the demand was prima facie time-barred and that there was no suppression of facts, misrepresentation or fraud.

Analysis: The applicants had been drawing cigarette samples for testing over a long period with the department's knowledge, and the record showed correspondence, maintenance of registers, departmental visits and earlier litigation on the same issue. In this background, the material did not, at the prima facie stage, support an allegation of suppression, misrepresentation or fraud with intent to evade duty. The order further noted that the department ought to have raised the demand earlier instead of waiting for finality on the legal issue, and that the applicants had shown a strong prima facie case on limitation.

Conclusion: The applicants were entitled to unconditional waiver of pre-deposit and stay of recovery till disposal of the appeal.

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