Beneficial exemption for silver bars supported waiver of pre-deposit and stay of recovery at the prima facie stage.

A beneficial exemption for silver bars cleared during manufacture of copper cathodes was treated as applicable despite another entry in the same notification taxing silver in other forms. The text states that exemption cannot be denied merely because the notification also contains a duty entry for silver in different forms, and that at the stay stage a construction favourable to the assessee may be adopted where two views are possible. On that basis, a strong prima facie case was found for waiver of pre-deposit and stay of recovery pending the appeal.

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Issues: Whether the appellant had made out a prima facie case for waiver of pre-deposit and stay of recovery in respect of duty, interest and penalty demanded on silver bars cleared during manufacture of copper cathodes under Notification No. 5/2006-CE dated 01.03.2006.

Analysis: The appellant was clearing silver in bar form arising during the manufacture of copper cathodes. The notification granted exemption to silver bars, while another entry provided duty on silver in any form. The claimed exemption could not be denied merely because the same notification contained a duty entry for silver in other forms. A beneficial exemption is to be construed in favour of the assessee, and the settled principle is that where two views are possible, the one favourable to the assessee may be applied at the stage of stay. On that basis, a strong prima facie case for waiver was made out.

Conclusion: The appellant was entitled to waiver of pre-deposit and stay of recovery pending disposal of the appeal.

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