Prima facie case against duplicate duty on fabric conversion justified stay of recovery subject to security conditions.

Cutting and stitching fabric into bed-sheets was found to raise a strong prima facie case against further duty demand, because Tariff Item 19 appeared to cover fabrics in running length and fresh duty on the same item did not appear justified. The Tribunal also noted that unresolved entitlement to proforma credit strengthened the applicants' interim case. On that basis, recovery of duty and penalty was stayed pending disposal of the appeals, subject to personal bonds and an undertaking not to dispose of machinery and assets.

---

---

Issues: Whether the applicants were entitled to stay and waiver of recovery of the demanded duty and penalty pending disposal of the appeals, on the basis of a prima facie case and the plea that the activity did not amount to a separately taxable manufacture.

Analysis: The activity consisted of cutting and stitching fabrics into bed-sheets. On a prima facie view, Tariff Item 19 was treated as covering fabrics in running length, and the imposition of duty again on the same item did not appear justified. The Tribunal also noted the plea that, even if the activity were excisable, proforma credit of the fabrics had not been extended, which was a substantive benefit. In these circumstances, the applicants were found to have made out a prima facie case for interim protection, subject to furnishing personal bonds and undertaking not to dispose of machinery and assets.

Conclusion: Stay and waiver of recovery of the duty and penalty amounts were granted pending disposal of the appeals, upon furnishing the required personal bonds.

Final Conclusion: Interim relief was granted in aid of the appeals, with recovery kept in abeyance on security conditions, leaving the merits open for final adjudication.

Ratio Decidendi: Where the appellant demonstrates a strong prima facie case against the demand and a substantive unresolved entitlement such as proforma credit, interim stay of recovery may be justified on appropriate security conditions.

---