Prima facie excise exemption on aviation turbine fuel for foreign aircraft supported waiver of pre-deposit and stay of recovery.

A prima facie exemption from central excise duty on aviation turbine fuel supplied to foreign aircraft was accepted on the basis of the Ministry of Civil Aviation notification issued under the Foreign Aircraft (Exemption from Taxes and Duties on Fuel and Lubricants) Act, 2002. That notification was treated as sufficient at the interim stage to indicate that exemption could apply even for the period before the Central Excise notification took effect. On that basis, pre-deposit of the demand and penalty was waived and recovery stayed pending disposal of the appeal.

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Issues: Whether the applicant was entitled to waiver of pre-deposit and stay of recovery on the basis of a prima facie exemption from central excise duty on aviation turbine fuel supplied to foreign aircraft.

Analysis: The exemption notification issued by the Ministry of Civil Aviation under Section 3 of the Foreign Aircraft (Exemption from Taxes and Duties on Fuel and Lubricants) Act, 2002 was considered sufficient at the prima facie stage to support the claim that exemption was available even for the period prior to the Central Excise notification taking effect. On that basis, the demand and penalty were not required to be secured by pre-deposit pending disposal of the appeal.

Conclusion: The applicant was entitled to waiver of pre-deposit and stay of recovery pending appeal.

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