Suppression allegation and extended-period demand were not prima facie made out, leading to unconditional stay and waiver of recovery.

Allegation of suppression did not prima facie justify invocation of the extended period for a duty demand where the metal containers had long been cleared in unassembled condition under Chapter X procedure for captive use, a practice already within the Department's knowledge. An earlier show cause notice had also been issued without any suppression allegation. In that setting, the later demand for the past period lacked prima facie support, so unconditional stay and waiver of recovery of duty and penalty were granted, and the Department was restrained from disposing of the plant and machinery or interfering with normal production pending appeal.

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Issues: Whether the allegation of suppression justified invocation of the extended period for duty demand and consequent insistence on pre-deposit.

Analysis: The applicants had been clearing metal containers in unassembled condition under Chapter X procedure for captive use for a long time, a fact which was within the Department's knowledge. The record also showed an earlier show cause notice without any allegation of suppression. In these circumstances, the allegation of suppression for the later notice was not accepted prima facie, and the demand for the past period appeared to have been raised after the earlier opportunity had been missed.

Outcome: Unconditional stay and waiver of recovery of duty and penalty were granted, and the Department was directed not to dispose of the plant and machinery or interfere with normal production till disposal of the appeal.

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