Pre-deposit waiver for duty and penalty granted on strong prima facie case from stock records and pre-levy manufacture

Waiver of pre-deposit was justified where the stock register, not disputed for authenticity, showed availability of marble slabs on 1-3-2006 and the declaration filed on 3-3-2006 recorded the opening stock as at midnight of 28-2-2006/1-3-2006. On that material, the appellant established a strong prima facie case that goods manufactured before levy but cleared after levy were not chargeable to duty. The requirement to deposit duty, interest and penalty was therefore waived, and recovery was stayed pending disposal of the appeal.

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Issues: Whether the appellant was entitled to waiver of pre-deposit of duty, interest and penalty and stay of recovery pending disposal of the appeal.

Analysis: The stock register showed availability of marble slabs as on 1-3-2006 and the Department did not dispute the authenticity of the register. The declaration filed on 3-3-2006 also recorded the opening stock as on the midnight of 28-2-2006/1-3-2006. On that material, and in the light of the principle that goods manufactured before levy but cleared after levy are not chargeable to duty, the appellant disclosed a strong prima facie case for waiver.

Conclusion: The requirement of pre-deposit of duty, interest and penalty was waived and recovery was stayed till disposal of the appeal.

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