Prima facie exemption interpretation can justify full waiver of pre-deposit and stay of recovery in an appeal.

A prima facie interpretation of an exemption notification for brass sheets and brass circles supported the assessee's reading of the relevant exclusion clause. The dispute concerned whether the department's construction of the notification clearly brought the goods within the exclusion at the stay stage. Relying on a cited precedent involving a similar exemption entry, the tribunal found the assessee's interpretation reasonably sustainable and did not treat the exclusion as clearly applicable. Full waiver of pre-deposit and stay of recovery pending disposal of the appeal were therefore granted.

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Issues: Whether the appellants were entitled to full waiver of pre-deposit and stay of recovery pending appeal, on a prima facie interpretation of the exemption notification governing brass sheets and brass circles.

Analysis: The goods were cleared under Notification No. 6/2002-C.E. dated 1-3-2002. The dispute turned on whether the exclusion in the notification, as understood by the department, covered brass sheets and brass circles. On a prima facie basis, the interpretation placed by the appellants was found supportable from the cited precedent concerning a similar exemption entry, and the exclusion was not treated as clearly attracting the imported goods at the stage of stay consideration.

Conclusion: The appellants were granted full waiver of the pre-deposit requirement and stay of recovery pending disposal of the appeal.

Ratio Decidendi: Where the statutory exemption entry is prima facie capable of covering the imported goods, full waiver of pre-deposit and stay of recovery may be granted pending appeal.

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