Job-work clearance under Notification 214/86-CE supported prima facie waiver of predeposit and stay where fault lay with the supplier.

Job-work clearances made under Notification No. 214/86-CE were treated as prima facie eligible for waiver of predeposit and stay of recovery where no omission or commission was attributable to the appellant. The demand arose from an allegation that the supplier had no factory capable of manufacturing the final product, but the appellate findings indicated that any deficiency, if any, lay at the supplier's end and not with the appellant. On that basis, the tribunal found a prima facie case against insisting on immediate deposit and granted waiver of predeposit with stay of recovery pending disposal of the appeal.

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Issues: Whether the appellant was entitled to waiver of predeposit and stay of recovery in respect of the disputed duty demand arising from job-work clearances under Notification No. 214/86-CE.

Analysis: The appellant received materials under the Cenvat credit rules, undertook job work, and cleared the final product without payment of duty by claiming the benefit of Notification No. 214/86-CE. The demand was founded on the allegation that the supplier had no factory capable of manufacturing the final product. On a perusal of the appellate findings, no omission or commission attributable to the appellant was found that would make it ineligible for the notification benefit. Any deficiency, if at all, was noted to lie at the supplier's end. On that basis, a prima facie case was made out against insisting on immediate deposit.

Conclusion: The appellant was granted waiver of predeposit and stay of recovery till disposal of the appeal.

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