Curable defect in exemption declaration supported interim stay of duty demand where no intent to evade was shown.

A curable defect in an exemption declaration relating to the description of inputs did not, on the record, justify immediate recovery of the duty demand. The appellants had filed returns showing full particulars of production and clearances, and there was no evidence of intent to evade duty. The tribunal noted that the defect could have been pointed out earlier by departmental officers and that no prejudice to revenue was shown. On these facts, a prima facie case for interim protection was made out, and stay of the impugned demand was granted pending disposal of the appeal.

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Issues: Whether the appellants were entitled to stay of the duty demand pending disposal of the appeal on the basis of a prima facie case, absence of intent to evade duty, and a curable defect in the declaration filed for availing exemption under Notification No. 50/2003-C.E. dated 10th June, 2003.

Analysis: The declaration defect related to the description of inputs and was treated as curable. The order recorded that the appellants had been filing returns showing full particulars of production and clearances, and that there was no evidence of any intent to evade payment of duty. It was also observed that the departmental officers could have pointed out the defect earlier and required the necessary particulars. On these facts, a prima facie case for interim protection was made out and no prejudice to the revenue was shown if stay was granted.

Conclusion: The appellants were entitled to stay of the impugned demand order pending disposal of the appeal.

Final Conclusion: Interim relief was granted by suspending recovery of the demand until the appeal is decided.

Ratio Decidendi: Where the record shows a curable procedural defect in the exemption declaration, absence of intent to evade duty, and a prima facie case on merits, interim stay of duty demand can be granted pending appeal.

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