Conditional exemption procedure under Rule 19 supported waiver of pre-deposit and stay of recovery pending appeal.

Notification No. 44/2001-CE (N.T.) was treated as a conditional notification under Rule 19 of the Central Excise Rules, requiring strict compliance with the prescribed procedure. On the record, the applicants established a prima facie case for interim relief because the manufacturer-suppliers who cleared the goods on payment of duty were not parties to the proceedings, and the allegation of collusion was not sustainable at the pre-deposit stage. The Tribunal therefore granted waiver of pre-deposit and stay of recovery pending the appeals.

---

---

Issues: Whether the applicants were entitled to waiver of pre-deposit and stay of recovery in view of the Notification No. 44/2001-CE (N.T.) procedure and the allegation of collusion with the supplier-manufacturers.

Analysis: The notification was treated as a conditional notification issued under Rule 19 of the Central Excise (No.2) Rules, 2001, and the prescribed procedure had to be strictly followed. On the record before it, the applicants showed a prima facie case because the manufacturers who cleared the goods on payment of duty were not parties to the proceedings, and the allegation of collusion could not be sustained at the interim stage. The Tribunal therefore found that the applicants had made out a case for dispensing with pre-deposit pending the appeals.

Conclusion: The applicants were held entitled to waiver of pre-deposit and stay of recovery during pendency of the appeals.

---