Exemption notification interpretation on intervening duty payments supports waiver of pre-deposit and stay of recovery.

An exemption notification granting benefit for the first clearances up to an aggregate of 3,500 metric tonnes in a financial year was construed as not prohibiting the payment of duty on some intervening consignments before the quota was exhausted. The revenue's contention that such duty payment required duty to be demanded on all clearances from the outset was rejected on the wording of the notification, and the assessee's eligibility to the exemption was not in dispute. On that basis, a prima facie case was found for waiver of pre-deposit, and recovery was stayed pending disposal of the appeal.

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Issues: Whether the appellant made out a prima facie case for waiver of pre-deposit on the question whether duty paid on some clearances during the course of availing the exemption altered entitlement to the benefit under the exemption notification.

Analysis: The exemption notification granted benefit for the first clearances up to an aggregate quantity of 3500 metric tonnes in a financial year. The appellant's case was that duty had been paid only on some consignments before the full quota was exhausted, while the revenue contended that such intervening duty payment required duty to be demanded on the entire clearances from the beginning. The notification wording was found not to impose such a restriction, and the appellant's eligibility to the notification was not disputed.

Conclusion: The appellant established a prima facie case for waiver of pre-deposit, and recovery was stayed pending disposal of the appeal.

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