Prima facie exemption for supplies to internationally financed projects can justify waiver of pre-deposit and stay of recovery.

In a stay application, the Tribunal held that prima facie entitlement to exemption under Notification No. 108/95-C.E. can justify waiver of pre-deposit and stay of recovery where the supplies appear to have been made to projects financed by an international organisation. It noted that the notification covers both direct supplies to the organisation for its official use and supplies to projects financed by it. On the facts, the machinery was prima facie supplied to projects financed by the Asian Development Bank, so the assessee was treated as potentially eligible for the exemption and interim protection was granted.

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Issues: Whether, in a stay application, pre-deposit of the demanded dues should be waived and recovery stayed on the assessee's prima facie entitlement to the benefit of Notification No. 108/95-C.E. for supplies made to projects financed by an international organisation.

Analysis: The Tribunal noted that large projects are ordinarily executed through contractors and that the notification contemplates two kinds of supplies: direct supplies to the international organisation for its official use and supplies made to projects financed by such organisation. On the facts presented, the Tribunal formed a prima facie view that the machinery was supplied to projects financed by the Asian Development Bank and that the assessee may therefore qualify for the exemption.

Conclusion: Pre-deposit was waived and recovery of the impugned dues was stayed until disposal of the appeal.

Ratio Decidendi: For purposes of interim relief, a prima facie entitlement to exemption under a notification covering supplies to projects financed by an international organisation can justify waiver of pre-deposit and stay of recovery.

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