Exemption notification and prima facie case justified waiver of pre-deposit and stay of duty and penalty recovery.

An exemption under Notification No. 6/2002 for equipment and machinery procured for the Delhi MRTS project was relied on to challenge a duty and penalty demand on steel plates used as part of traction equipment. The material before CESTAT indicated that the disputed items fell within the scope of the exemption, which established a strong prima facie case for interim relief. On that basis, the Tribunal waived the requirement of full pre-deposit of duty and penalty and granted stay of recovery in favour of the assessee.

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Issues: Whether the appellant was entitled to waiver of pre-deposit and stay of recovery of duty and penalty on the strength of the exemption notification.

Analysis: The demand arose from denial of the exemption available under Notification No. 6/2002 for equipment and machinery procured for use in the Delhi MRTS project. The disputed steel plates were shown to be used as part of traction equipment, and the material placed before the Tribunal indicated that such items fell within the scope of the exemption. On that basis, the appellant established a strong prima facie case for interim relief.

Conclusion: The requirement of pre-deposit of the entire duty and penalty was waived and the stay petition was allowed in favour of the assessee.

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