Prima facie case against clandestine removal demand justified waiver of pre-deposit and stay of recovery pending appeal.

In a demand based on alleged clandestine removal inferred from power consumption and valuation of clearances to the assessee's own unit, the interim record did not show the demand to be free from doubt. The computation was linked to transfer of the entire MS ingot production to the White Field unit and to cost of production, while inclusion of alleged clandestine removals would alter total production and reduce the cost per MT. On that footing, the assessee established a prima facie case for waiver of pre-deposit, and recovery of the demanded duty and penalties was stayed pending disposal of the appeals.

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Issues: Whether the appellant made out a prima facie case for waiver of pre-deposit and stay of recovery in a demand of duty and penalties founded on alleged clandestine removal, where the demand was worked out on power consumption and valuation of clearances to the appellant's own unit.

Analysis: The demand was said to arise from alleged clandestine removals inferred from power consumption. The record showed that the entire production of MS ingots from the factory was transferred to the White Field unit, and that the demand had been computed on the basis of the value of goods cleared to that unit by applying cost of production. If clandestine removals were to be added to the total production, the total production figure would rise and the cost of production per MT would correspondingly fall. On that basis, the demand was not shown to be free from doubt at the interim stage, and the appellant established a prima facie case.

Conclusion: Waiver of pre-deposit was justified and recovery of the demanded amounts was stayed pending disposal of the appeals.

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