Export oriented unit scrap clearance to domestic tariff area supported prima facie case for waiver of pre-deposit and stay.

An export oriented unit established a prima facie case for waiver of pre-deposit and stay of recovery on duty, interest and penalty relating to clearance of paper scrap to the domestic tariff area. The Tribunal noted that its earlier order had treated the appellant as an export oriented unit and had held that segregation of scrap in the factory amounted to manufacture during the relevant period. On that basis, clearance of paper waste into the domestic tariff area was considered permissible under the applicable Foreign Trade Policy for the period in question, and interim relief was granted by staying recovery pending disposal of 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 arising from clearance of paper scrap to the domestic tariff area by an export oriented unit.

Analysis: The appellant's own earlier order was noted as holding that the appellant was an export oriented unit and that segregation of scrap in its factory would amount to manufacture during the relevant period. On that basis, clearance of paper waste into the domestic tariff area was treated as permissible under the relevant Foreign Trade Policy for the period in question. The Tribunal therefore found that the appellant had established a prima facie case for interim relief.

Conclusion: The application for waiver of pre-deposit was allowed and recovery of the demanded amounts was stayed till disposal of the appeal.

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