Prima facie grounds test governs stay relief where Revenue challenges transitional credit on exempt or nil-rated goods.

Transitional credit on rectified spirit and neutral spirit was examined in the context of Revenue's request to stay the Commissioner (Appeals)'s order. Revenue argued that the relevant Central Excise Rules treated the goods as exempt or chargeable at nil rate, making credit inadmissible. On a prima facie review, the Tribunal held that sufficient grounds were not shown to justify interference with the order under challenge. The stay application was therefore rejected. The governing principle stated is that stay relief will not be granted unless the applicant establishes adequate prima facie grounds for interference.

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Issues: Whether the Revenue had made out a sufficient prima facie case for stay of the Commissioner (Appeals)'s order allowing transitional credit.

Analysis: The dispute concerned entitlement to transitional credit in relation to rectified spirit and neutral spirit, with the Revenue relying on the relevant Central Excise Rules to contend that the goods were exempt or chargeable at nil rate and that credit was not admissible. On a prima facie consideration of the rival submissions, the Tribunal found that sufficient grounds were not made out to invoke its jurisdiction to stay the order under challenge.

Conclusion: The Revenue's stay application was rejected.

Ratio Decidendi: A stay will not be granted unless the applicant establishes sufficient prima facie grounds warranting interference with the order under challenge.

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