Customs exemption dispute and prima facie limitation case justified partial pre-deposit and waiver of recovery pending appeal.

In a customs exemption dispute over whether imported goods qualified as absorbable haemostatic material or were merely wound management bandages, conflicting expert material meant the merits required fuller examination at final hearing. The Tribunal also found a prima facie limitation point in favour of the appellants because the goods had been imported and cleared under the notification for several years, making invocation of the extended period arguable. On that basis, only partial pre-deposit was directed, with deposit of Rs. 2,50,000 and waiver of the balance duty and entire penalty during pendency of the appeals.

---

---

Issues: Whether the appellants were entitled to waiver of the balance pre-deposit and stay of recovery in a dispute concerning exemption under the customs notification, and whether the plea of limitation made out a prima facie case for partial relief.

Analysis: The dispute turned on whether the imported goods were absorbable haemostatic material for control of surgical vessel bleeding or merely wound management bandages. The materials placed on record, including expert opinions, were conflicting, and the merits were found to require full consideration at final hearing. On limitation, the appellants had been importing the goods and availing the benefit of the notification for several years, and the Tribunal found a prima facie case in their favour against invocation of the extended period. In view of the arguable nature of the merits and the prima facie limitation point, only a partial pre-deposit was considered appropriate.

Conclusion: The appellants were directed to deposit Rs. 2,50,000/- and, on such deposit, the balance duty and entire penalty were waived during pendency of the appeals.

---