Pre-deposit waiver and recovery stay granted where exemption denial showed prima facie weakness and no suppression was evident.

Waiver of pre-deposit was granted and recovery stayed in respect of duty demands, interest and penalties arising from denial of exemption notifications. One demand disclosed a strong prima facie case because an earlier stay order had been passed in an identical matter. The other demand was also treated as prima facie unsustainable, since clearance had been made on the certificate required by the notification, which negatived a prima facie allegation of suppression or misdeclaration with intent to evade duty. The appeal was allowed to proceed without pre-deposit pending final determination.

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Issues: Whether the assessee was entitled to waiver of pre-deposit and stay of recovery in respect of the duty demands and penalties arising from denial of exemption under the relevant notifications.

Analysis: The first demand was found to disclose a strong prima facie case for waiver of pre-deposit, following the assessee's earlier stay order in an identical matter. The second demand was also held, prima facie, to be unsustainable because clearance had been made on the basis of the certificate required by the notification, which negatived any prima facie allegation of suppression or misdeclaration with intent to evade duty.

Conclusion: Waiver of pre-deposit was granted for both demands, together with interest and penalties, and recovery was stayed pending the appeal.

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