Served from India Scheme clearances: prima facie non-exempt status supported waiver of pre-deposit and stay of recovery.

Clearances under the Served from India Scheme were treated as having prima facie legal support for not amounting to exempt clearances under Notification No. 34/2006-C.E., so the demand for reversal or payment of 10% of the goods' value was not shown to be clearly sustainable at the interim stage. Relying on the earlier view of the Bangalore Bench, the Tribunal found that the appellants had made out a prima facie case for waiver of pre-deposit and stay of recovery. Interim protection was granted, and further pre-deposit of duty and penalty was waived pending final disposal of the appeal.

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Issues: Whether the appellants had made out a case for waiver of pre-deposit and stay of recovery in a dispute concerning duty liability on goods cleared under the Served from India Scheme.

Analysis: The appellants contended that clearances made under the Served from India Scheme under Notification No. 34/2006-C.E. were not exempt clearances so as to attract the demand for reversal or payment of 10% of the value of the goods. The Tribunal noted the earlier view of the Bangalore Bench that debits made in SFIS would not amount to exemption from payment of duty, and observed that this contention carried prima facie strength on the facts of the case.

Conclusion: The appellants were granted stay and further pre-deposit of duty and penalty was waived till final disposal of the appeal.

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