Prima facie exemption entitlement supported waiver of pre-deposit and stay of recovery pending appeal.

An exemption notification covered goods, other than cigarettes, supplied as stores for consumption on board a vessel of the Indian Navy. The applicants claimed that cleaning equipment supplied to Navy units was certified for exclusive use as stores on board such a vessel. On that factual material, the Tribunal found a prima facie entitlement to the notification benefit and treated that as sufficient for waiver of pre-deposit of duty and penalty. Recovery was stayed pending the appeal, reflecting the principle that a demonstrable prima facie case can justify interim protection where exemption eligibility is supported by the record.

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Issues: Whether the applicants had made out a prima facie case for waiver of pre-deposit of duty and penalty and for stay of recovery pending the appeal in the light of the exemption available under the notification for goods supplied as stores for consumption on board a vessel of the Indian Navy.

Analysis: The applicants supplied cleaning equipments to units of the Indian Navy and produced a certificate that the goods would be put to exclusive use as stores on board a vessel of the Indian Navy. The benefit under the notification was available to goods other than cigarettes when supplied as stores for consumption on board a vessel of the Indian Navy. On the facts placed before it, the Tribunal found that a prima facie case had been made out having regard to the language of the notification.

Conclusion: Waiver of pre-deposit was granted and recovery of the duty and penalty was stayed pending the appeal.

Ratio Decidendi: Where the factual material discloses a prima facie entitlement to the benefit of an exemption notification, pre-deposit can be waived and recovery stayed pending appeal.

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