Prima facie case on separate assessment and duty payment secured waiver of pre-deposit and stay of recovery.

A prima facie case was found for waiver of pre-deposit and stay of recovery in a dispute over differential duty on goods returned after rejection of an export consignment. The applicant said the goods were brought back to the factory, reprocessed, and then partly re-exported, while the balance was cleared for home consumption on payment of duty on the transaction value applicable to domestic clearances. Revenue relied on Rule 19 of the Central Excise Rules, 1944 for alleged procedural non-compliance in bringing the goods back. The Tribunal accepted that each assessment is separate and that duty had been paid on the home-consumption clearances, and therefore waived pre-deposit of duty and penalty pending appeal.

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Issues: Whether the applicant had made out a prima facie case for waiver of pre-deposit and stay of recovery in a dispute concerning differential duty on goods cleared for home consumption after return from export.

Analysis: The applicant's case was that the export consignment was rejected, the goods were returned to the factory, reprocessed, and thereafter part of the goods were exported while the balance was cleared for home consumption on payment of duty on the transaction value applicable to such domestic clearances. The Revenue invoked Rule 19 of the Central Excise Rules, 1944 on the ground of non-compliance with the procedure for bringing the goods back to the factory. The Tribunal accepted the applicant's contention that each assessment is separate and that duty had been discharged on the goods cleared for home consumption, which was sufficient at the prima facie stage.

Conclusion: The applicant was held to have made out a prima facie case, and pre-deposit of duty and penalty was waived with recovery stayed during pendency of the appeal.

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