Exemption notifications prevail over later circulars when no new restriction is stated, supporting waiver of pre-deposit and recovery stay.

An advance-licence import made before a later policy circular was held to remain covered by the exemption notification, because the notification contained no express restriction on Indian-origin goods and the circular could not add a new condition or narrow the statutory exemption. On that prima facie basis, the tribunal found sufficient grounds to waive pre-deposit and to stay recovery of the demanded duty pending appeal. The decision reinforces that a circular cannot override or whittle down an exemption granted by notification issued under the statute.

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Issues: Whether the duty pre-deposit and recovery of duty demanded should be waived pending disposal of the appeal in view of the exemption notification and the subsequent policy circular.

Analysis: The import was made against an advance licence before the policy circular relied upon by the department. The exemption notification did not contain any express restriction against import of Indian-origin goods, and the later circular could not be used to impose a new condition or curtail the scope of the statutory exemption. On the materials available, the appellant had made out a strong prima facie case for waiver, supported by the principle that a circular cannot override or whittle down a notification issued under the statute.

Conclusion: The pre-deposit of the demanded duty was waived and recovery was stayed pending disposal of the appeal, in favour of the assessee.

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