Customs exemption notification dispute: interim relief granted where procedural conditions for duty demand were not shown.

Prima facie waiver of pre-deposit and stay of recovery was granted where customs duty, interest and penalty were demanded for alleged breach of conditions in a customs exemption notification. The Tribunal accepted a preliminary contention that the demand was based on Notification No. 21/2002-Cus. without showing that the Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 1996 applied as a procedural condition. On that basis, the assessee's challenge to the jurisdictional basis of the demand was treated as having sufficient merit for interim relief during pendency of the appeal.

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Issues: Whether pre-deposit of customs duty, interest and penalty should be waived and recovery stayed during pendency of the appeal where the demand was raised by excise authorities for alleged breach of conditions of a customs exemption notification.

Analysis: The demand arose from alleged non-fulfilment of the conditions of Notification No. 21/2002-Cus. dated 1-3-2002. The applicant contended that the Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 1996 were not attracted because the notification did not require compliance with that procedure. The Tribunal found prima facie merit in the contention that the jurisdictional excise authorities had raised the demand in respect of a customs notification without the applicable procedural condition being shown.

Conclusion: Pre-deposit was waived and recovery was stayed during pendency of the appeal.

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