Reconstituted fruit juice classification supported interim relief as CESTAT found a strong prima facie exemption case.

Reconstituted fruit juice manufactured from fruit concentrates was treated as falling within the HSN explanatory notes for reconstituted juice, and the record showed compliance with the prescribed brix standards. As no evidence indicated that the added water exceeded the level found in natural juice, the tariff position and the relevant exemption notifications supported the assessee's claim that the goods were not liable to duty under the department's classification, or were otherwise exempt. On that basis, CESTAT found a strong prima facie case for interim relief and waived pre-deposit of the duty and penalty while staying recovery pending the appeal.

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Issues: Whether the applicants had made out a prima facie case for waiver of pre-deposit and stay of recovery in respect of duty and penalty on the ground that the product was classifiable as reconstituted fruit juice and, in any event, was exempt under the relevant notifications.

Analysis: The product was manufactured from fruit concentrates and answered the description of reconstituted juice under the HSN explanatory notes. The record showed compliance with the prescribed brix standards, and there was no evidence that the quantity of water added exceeded what is contained in natural juice. The tariff position and the exemption notifications supported the assessee's claim that the goods were not liable to duty under the classification adopted by the department, or were otherwise exempt. On that basis, the Tribunal found a strong prima facie case in favour of the applicants for interim relief.

Conclusion: The pre-deposit of the entire duty and penalty was waived and recovery was stayed pending disposal of the appeal.

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