Exemption notification delay in filing option did not defeat prima facie entitlement to waiver of duty and penalty pre-deposit.

An exemption scheme for industrial units in Uttarakhand was construed as granting fiscal benefit where production had commenced and the exemption otherwise applied for the relevant period. Delay in filing the option under the notification was treated as the only default, and denial of the benefit solely on that basis was considered too harsh on the stated facts. The appellant was therefore found to have established a strong prima facie case, and full waiver of pre-deposit of duty and penalty was granted pending disposal of the appeal.

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Issues: Whether the appellant was entitled to waiver of pre-deposit of duty and penalty despite delay in exercising the option under the exemption notifications governing units established in Uttarakhand.

Analysis: The exemption scheme was intended to extend fiscal benefit to eligible industrial units in Uttarakhand. The only default noted was delay in filing the option, while production had already commenced and the exemption otherwise applied for the relevant period. On the facts, denying the entire benefit solely for delayed exercise of the option was considered too harsh, and the appellant was found to have made out a strong prima facie case.

Conclusion: Full waiver of the pre-deposit of duty and penalty was granted till disposal of the appeal.

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