Disputed classification of tankers and containers supported SSI exemption relief and stay of recovery on a prima facie view.

Disputed classification of tankers/containers determined entitlement to SSI exemption and interim relief from recovery. The Tribunal noted a prima facie record that the goods had not yet been mounted on duty-paid chassis; if unmounted, they would fall under Heading 87.07 or Heading 73.11 rather than Heading 87.04, and those headings were stated to be covered by the SSI notification. On that basis, the applicants established a prima facie case for waiver of pre-deposit, and duty and penalty recovery was stayed pending the appeal.

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Issues: Whether the applicants had made out a prima facie case for waiver of pre-deposit and stay of recovery in view of the disputed classification of tankers/containers and the claimed SSI exemption.

Analysis: The duty demand was founded on denial of SSI exemption on the premise that the goods were classifiable under Heading 87.04 of the Central Excise Tariff Act, 1985. The Tribunal found that, on a prima facie view, the adjudication record indicated that the applicants had not yet mounted the tankers/containers on duty-paid chassis. If the goods were still unmounted, they would fall under Heading 87.07 or Heading 73.11, both of which were stated to be covered by the SSI notification. On that basis, a prima facie case was held to exist for relief from pre-deposit.

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

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