Retrospective withdrawal of essentiality certificate facility cannot unsettle completed exempt supplies; waiver of pre-deposit granted pending appeal.

Supplies made under valid essentiality certificates issued before the later withdrawal of the certification facility could not, on a prima facie basis, be unsettled by that subsequent communication because nothing in its wording indicated retrospective operation. The exemption framework under Notification No. 10/97-CE therefore continued to support relief where the transactions had been completed before the withdrawal notice. On that basis, a strong prima facie case existed for protection against recovery pending appeal, justifying waiver of pre-deposit and interim stay of duty and penalty recovery.

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Issues: Whether the appellant was entitled to waiver of pre-deposit and interim stay in view of the exemption under Notification No. 10/97-CE and the subsequent withdrawal of the facility for issuing essentiality certificates.

Analysis: The goods had been supplied under the cover of essentiality certificates issued on 14-12-2001, and the supplies were completed by 27-2-2002. The later communication dated 26-6-2002 withdrawing the facility for issuing essentiality certificates was not stated to operate retrospectively, nor did its wording support an implied retrospective withdrawal. Transactions completed earlier under valid certificates could not, prima facie, be unsettled by that subsequent communication. On that basis, a strong prima facie case was made out for relief against recovery pending appeal.

Conclusion: The appellant was entitled to waiver of pre-deposit and interim stay of recovery of duty and penalty pending the appeal.

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