Prima facie exemption and classification under Chapter 84.24 justified waiver of pre-deposit and stay of recovery.

Goods treated as classifiable under Chapter Heading 84.24 and earlier regarded as eligible for exemption under Notification No. 46/94 created a strong prima facie case for waiver of pre-deposit of duty and penalties. Alleged clandestine removal did not, at the interim stage, justify confirmation of duty for the disputed period where the goods were already considered exempt from duty. On that basis, the applicants obtained waiver of pre-deposit and recovery was stayed pending the appeals.

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Issues: Whether the applicants made out a prima facie case for waiver of pre-deposit of duty and penalties in view of the classification of the goods under Chapter Heading 84.24 and the claimed exemption.

Analysis: The goods in question were treated as falling under Chapter Heading 84.24 of the Schedule to the Central Excise Tariff Act, 1985, and had already been regarded in earlier proceedings as eligible for exemption under Notification No. 46/94. On that basis, the existence of alleged clandestine removal did not, at this stage, justify confirmation of duty for the disputed period, because the goods were already considered exempt from payment of duty. This constituted a strong prima facie case for relief from the pre-deposit requirement.

Conclusion: The applicants were entitled to waiver of pre-deposit of duty and penalties, and recovery was stayed pending the appeals.

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