Customs pre-deposit waiver granted where classification, binding circular, and limitation issues raised a strong prima facie case.

A strong prima facie case was found for waiver of pre-deposit in a customs appeal because the classification dispute itself remained doubtful: whether imported component consignments could be clubbed as colour television sets in CKD/SKD condition, whether Rule 2(a) of the Interpretative Rules supported that approach, and whether the departmental circular on the manufacturing process was binding under Section 151-A of the Customs Act, 1962. The Court also noted substantial prima facie doubt on limitation, including the allegation of suppression for invoking the extended period. As the pre-deposit direction lacked real reasoning and the record showed the departmental case had already been rejected on a different basis, the condition was set aside and the appeal was to be heard on merits without deposit.

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Issues: Whether the petitioners had made out a strong prima facie case warranting waiver of pre-deposit of customs duty pending appeal before the Tribunal.

Analysis: The dispute turned on several interconnected matters, including whether the imported component consignments could be clubbed together as colour television sets in CKD/SKD condition, whether Rule 2(a) of the Interpretative Rules supported such classification, whether the departmental circular issued in relation to the manufacturing process was binding, and whether the show cause notice was within limitation. The order under challenge recorded no real reasoning for directing a large pre-deposit, while the materials on record showed that the Commissioner had himself rejected the departmental case on CKD/SKD import and had proceeded on a different basis. The Court found that the questions regarding clubbing of consignments, the binding nature of the circular under Section 151-A of the Customs Act, 1962, and the allegation of suppression for invoking the extended period all raised substantial prima facie doubt against the revenue's case.

Conclusion: The petitioners were held to have established a strong prima facie case, and the condition requiring pre-deposit was set aside, with the appeal directed to be heard on merits without deposit.

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