Suppression not made out where subsidiary relationship was disclosed and known, so unconditional stay on duty and penalty was granted.

Disclosed subsidiary status and departmental awareness of the holding-company relationship defeated a prima facie allegation of suppression for interim recovery purposes. The Bench noted that the assessee had disclosed the relationship in communications, the department had used that relationship for valuation, and the suppression case based only on the classification list was not persuasive. It also found the shifting approach to limitation, including dropping the demand for part of the period, inconsistent with the later reliance on undisclosed grounds. On those materials, the Bench held that a strong prima facie case was made out and granted unconditional stay of recovery of the disputed duty and penalty.

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Issues: Whether unconditional stay of the disputed duty and penalty was justified pending appeal in view of the assessee's disclosure of its subsidiary status, the department's knowledge of that fact, and the collector's reliance on grounds not covered by the show cause notice.

Analysis: The assessee had disclosed its relationship with the holding company in its communications, and the record indicated that the department was aware of that relationship and had acted upon it for valuation purposes. On the materials placed before the Bench, the department's allegation of suppression based only on the classification list was not found persuasive in light of the other evidence and prior departmental treatment. The order also noted that the demand had been dropped for part of the period on the apparent view that the longer period could not be invoked, and the reasons given for a different approach for the later period did not appear convincing. In these circumstances, the Bench found a strong prima facie case for stay.

Conclusion: Unconditional stay of recovery of the disputed duty and penalty was granted in favour of the appellant.

Ratio Decidendi: Where the assessee's relationship with the holding company was already disclosed and known to the department, a prima facie case of suppression was not made out for interim recovery purposes, and unconditional stay was warranted.

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