Classification of embroidered fabrics supported waiver of pre-deposit and stay of recovery pending appeal.

Embroidered fabrics were held to disclose a strong prima facie case for classification under Heading 58.05 rather than Chapter Heading 54.06, based on the nature of the goods and the Tribunal's earlier view supporting that classification. On that interim footing, the material on record was sufficient to justify dispensing with pre-deposit and granting stay of recovery pending the appeal.

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Issues: Whether the applicants had made out a strong prima facie case for waiver of pre-deposit and stay of recovery on the question whether the goods were classifiable under Heading 58.05 rather than Chapter Heading 54.06.

Analysis: The application for waiver of pre-deposit was considered in the light of the nature of the goods, which were admittedly embroidered fabrics, and the Tribunal's earlier view supporting classification under Heading 58.05. The material on record was sufficient at the interim stage to indicate that the goods could prima facie fall under Heading 58.05 and not under Heading 54.06 as proposed by the Revenue. This was treated as making out a strong prima facie case for dispensing with pre-deposit.

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

Ratio Decidendi: Where the material shows a strong prima facie case on classification, pre-deposit may be waived and recovery stayed pending appeal.

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