Prima facie invalidity of delayed Section 35-E(2) action justified unconditional stay against pre-deposit and recovery.

A serious prima facie challenge was raised to the Collector's direction under Section 35-E(2) of the Central Excises and Salt Act, 1944, on the ground that it was made after the statutory period and without clear power to condone delay. The Tribunal noted that the appellant had not been heard on that aspect and that the validity of the Collector's action required detailed examination at the appeal hearing. On those facts, interim protection was considered justified, and unconditional stay was granted against both pre-deposit and recovery pending disposal of the appeal.

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Issues: Whether the appellant was entitled to unconditional stay of pre-deposit and recovery pending hearing of the appeal, in view of the prima facie contention that the Collector's direction under Section 35-E(2) was beyond the statutory period and therefore invalid.

Analysis: The order records a serious prima facie challenge to the validity of the Collector's action under Section 35-E(2) of the Central Excises and Salt Act, 1944, on the ground that it was exercised after the period fixed by law and without any clear statutory power to condone delay. It was also noted that the appellant had not been heard on that aspect. The Tribunal held that these matters required detailed examination at the hearing of the appeal and that, on the facts stated, the appellant had made out a case for interim protection.

Outcome: Unconditional stay was granted against both the pre-deposit and recovery.

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