Pre-deposit waiver for reprocessed gelatines upheld where no new product emerged and suppression was not shown.

Prima facie waiver of pre-deposit was justified where defective and contaminated gelatines were brought back after intimation to the department and reprocessed by removing impurities under Rule 173H. The Tribunal found that the cited Special Bench reasoning on reprocessed goods appeared applicable and that the impugned order did not show how a new product with a distinct character, name and use had emerged. On limitation, the reconditioning activity was within the authorities' knowledge, so suppression was not prima facie established and the extended period under Section 11A was not made out. Waiver of duty and penalty was therefore granted pending appeal.

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Issues: Whether the applicants made out a prima facie case for waiver of pre-deposit of duty and penalty in a dispute concerning reprocessing of defective gelatines under Rule 173H and invocation of the extended period under Section 11A.

Analysis: The record indicated that the defective and contaminated gelatines were brought back after intimation to the department and were reprocessed by removing impurities and contamination. The Tribunal found, prima facie, that the reasoning in the cited Special Bench ruling on reprocessed goods applied to the facts and that the impugned order did not explain how a new product with a distinct character, name, and use had emerged. On limitation, the Tribunal noted that the reconditioning activity had been within the knowledge of the authorities and that the plea of suppression was, prima facie, not established.

Conclusion: The applicants established a prima facie case and were entitled to waiver of pre-deposit of duty and penalty pending the appeal.

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