Prima facie waiver of pre-deposit granted where exemption claim, classification history and limitation issue supported stay of recovery.

A prima facie waiver of pre-deposit and stay of recovery was granted where the applicants claimed exemption under Notification No. 30/2004 and stated that the twine was manufactured from monofilament or multifilament yarn on which no credit had been taken. The classification of the product as Heading 5607 had been accepted for a long period, and the earlier departmental understanding meant the limitation issue remained open at least prima facie. On that basis, the duty and penalty were not treated as fit for immediate recovery pending the appeals, and full interim relief was allowed.

---

---

Issues: Whether the applicants were entitled, at the prima facie stage, to waiver of pre-deposit and stay of recovery of the duty and penalty demanded against them.

Analysis: The applicants had raised a claim for exemption under Notification No. 30/2004 from the relevant date, and the manufactured twine was stated to be produced from monofilament or multifilament yarn on which no credit of duty had been taken. The authority also noted that the product had been classified as Heading 5607 for a long period, the departmental understanding had earlier accepted that position, and the question of limitation was therefore open at least prima facie. On that basis, the demand and penalty were not found fit for immediate recovery pending appeal.

Conclusion: The applicants were held entitled to waiver of the entire pre-deposit and to stay of recovery until disposal of the appeals.

Final Conclusion: The interim relief sought by the applicants was granted, and recovery of the impugned duty and penalty was kept in abeyance during the pendency of the appeals.

---