More beneficial exemption entry applied to vehicle manufacture from duty-paid chassis, supporting prima facie waiver of pre-deposit.

Where an assessee manufactures vehicles from duty-paid chassis without taking credit on the chassis or other inputs, it may claim the more beneficial exemption entry if the factual conditions are met. The Tribunal noted a plausible claim under Serial No. 212 of Notification No. 6/2002-C.E., applicable to vehicles manufactured out of duty-paid chassis where no credit was taken, rather than the department's proposed Serial No. 214 classification. It reaffirmed that, when two provisions are available, an assessee may rely on the more beneficial one. On that prima facie basis, full waiver of pre-deposit of duty, interest and penalties was granted and recovery stayed pending the appeal.

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Issues: Whether the appellants were entitled to full waiver of pre-deposit and stay of recovery on a prima facie showing that their goods fell under the more beneficial exemption entry rather than the revenue's proposed classification.

Analysis: The appellants received duty-paid chassis, did not avail credit on the chassis or other inputs, and carried out body-building activity before clearance. The record indicated a plausible claim under Serial No. 212 of Notification No. 6/2002-C.E. dated 01.03.2002, which applied where vehicles were manufactured out of duty-paid chassis and no credit had been taken, whereas the department sought to apply Serial No. 214. The Tribunal held that when two provisions are available, an assessee may seek the more beneficial one, and the appellant had made out a strong prima facie case.

Conclusion: Full waiver of pre-deposit of duty, interest and penalties was granted, and recovery was stayed pending disposal of the appeal.

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