Unconditional exemption under Central Excise Rules supported waiver of pre-deposit and an unconditional stay of recovery.

An unconditional exemption notification supported a strong prima facie case for the appellant, and the tribunal accepted the contention that Rule 19 of the Central Excise Rules, 2002 is relevant only where goods are otherwise dutiable. On that basis, pre-deposit of duty and penalty was waived and recovery was stayed unconditionally.

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Issues: Whether the appellant was entitled to waiver of pre-deposit and stay of recovery in view of the unconditional exemption notification and the contention that Rule 19 applies only where goods are liable to duty.

Analysis: The goods were stated to be covered by an unconditional exemption under Notification No. 6/2006 dated 01.03.2006. On that basis, and on the further contention that the procedure under Rule 19 of the Central Excise Rules, 2002 becomes relevant only where goods are otherwise dutiable, the appellant was found to have a strong prima facie case.

Conclusion: The requirement of pre-deposit of duty and penalty was waived and the stay petition was allowed unconditionally.

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