Show cause notice mismatch with adjudication ground justified prima facie waiver of pre-deposit and stay of recovery.

Demand at the stay stage was treated as prima facie unsustainable where the adjudication order rested on a ground not alleged in the show cause notices. The notices concerned alleged failure to establish that Modvat credit had not been taken or reversed for exported goods, but the adjudication order instead invoked non-compliance with an Amnesty Scheme and raised duty on that basis. As that basis was outside the notices, the order was viewed as going beyond the pleaded case, and the applicant established a strong prima facie case for relief. Unconditional waiver of pre-deposit and stay of recovery was granted.

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Issues: Whether the demand could be sustained at the stay stage when the adjudication order proceeded on a ground not alleged in the show cause notices, and whether the applicant had made out a prima facie case for unconditional waiver of pre-deposit and stay of recovery.

Analysis: The notices alleged failure to establish that Modvat credit had not been taken or reversed in respect of the exported goods. The adjudication order, however, relied on non-compliance with an Amnesty Scheme and demanded duty on that basis. Since that ground was not part of the show cause notices, the adjudication order was prima facie seen as going beyond the allegations made. On that basis, the applicant was found to have made out a strong prima facie case.

Conclusion: The applicant was entitled to unconditional waiver of pre-deposit and stay of recovery.

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