Small scale exemption dispute: interim stay and waiver of duty recovery granted pending appeal and proposed Section 11C relief.

Recovery of the duty demand was stayed and waived pending disposal of the appeal where the dispute concerned denial of small scale exemption for a limited period due to the absence of registration with the Director of Industries. The Tribunal noted that the registration requirement was later deleted and that a Section 11C notification was being contemplated to waive duty on non-registered small scale units for the relevant period. On that basis, interim protection was granted against recovery of the duty amount.

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Issues: Whether recovery of the duty demand should be stayed and waived pending disposal of the appeal in view of the claimed exemption position and the proposed application of Section 11C.

Analysis: The demand related to denial of small scale exemption for a limited period when registration with the Director of Industries was required. The Tribunal noted the submission that the requirement was later deleted and that the Finance Ministry was contemplating a notification under Section 11C to waive duty on non-registered small scale units for the relevant period. In that background, the Tribunal granted interim protection against recovery.

Conclusion: Stay and waiver of recovery of the duty amount were granted in favour of the appellant.

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