Demand beyond show cause notice found prima facie unsustainable, supporting waiver of pre-deposit and stay of recovery

A demand based on grounds not disclosed in the show cause notice was treated as prima facie unsustainable at the interim stage because the adjudication travelled beyond the notice. On that basis, the tribunal found the demand lacked a proper foundation for recovery pending appeal and granted waiver of pre-deposit with stay of recovery until final disposal.

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Issues: Whether the demand, being based on grounds not set out in the show cause notice, justified waiver of pre-deposit and stay of recovery.

Analysis: The impugned demand was found to have proceeded on grounds travelling beyond the proposals in the show cause notice. On a prima facie appraisal of the record, the adjudged liability was held not sustainable at the interim stage because the foundation of the demand did not conform to the notice.

Conclusion: The appellant was entitled to waiver of pre-deposit and stay of recovery pending disposal of the appeal.

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