Prima facie case on classification and limitation supported full waiver of pre-deposit and stay of recovery.

Competing interpretations on product classification and the demand justified interim protection where the assessee had a prior favourable decision and a prima facie case against invocation of the longer limitation period. At the stay stage, the merits were left open, but the tribunal granted full waiver of the pre-deposit and stayed coercive recovery pending final disposal of the appeal. The operative principle is that a strong prima facie case, especially on classification and limitation, can support waiver of pre-deposit and interim relief from recovery.

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Issues: Whether the appellants were entitled to full waiver of the pre-deposit and stay of recovery at the interim stage, including whether the demand disclosed a prima facie case for invoking the longer period.

Analysis: The dispute concerned classification of the product and the applicability of the demand raised under the impugned order. At the stay stage, the merits were not finally to be determined. The appellants had a prior favourable decision on the issue, and the departmental views showed differing interpretations. On that basis, the case disclosed a prima facie position against invocation of the longer period, warranting interim protection from recovery.

Conclusion: Full waiver of the dues demanded in the impugned order was granted and coercive recovery was stayed till disposal of the appeal.

Final Conclusion: Interim relief was granted in favour of the appellants, while the substantive classification dispute was left open for final hearing.

Ratio Decidendi: Where the assessee has a prima facie favourable position and the dispute involves competing interpretations, pre-deposit may be waived and recovery stayed pending final adjudication.

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