Prima facie limitation and disputed classification can justify waiver of pre-deposit and stay of recovery pending appeal.

In a stay application, a strong prima facie case on limitation can justify waiver of pre-deposit and stay of recovery. Here, delay in issuing the show cause notice after the Department had relevant information, together with the plea that the product was already known to the Department and that suppression was absent, supported a prima facie limitation objection. The classification dispute, duty computation, and the evidentiary value of the test report and certificates were treated as issues for full examination in the main appeal, not for final decision at the interim stage. On that basis, pre-deposit was waived and recovery stayed pending appeal.

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Issues: Whether, in the stay application, the applicant had made out a prima facie case for waiver of pre-deposit and stay of recovery on the ground that the demand appeared to be time-barred and that the classification and evidentiary objections could be examined in the appeal.

Analysis: The application turned on the totality of the circumstances. The departmental delay in issuing the show cause notice after receipt of relevant information, coupled with the applicant's plea that the Department was already aware of the product and that suppression was absent, gave rise to a prima facie case on limitation. The classification dispute, the correctness of the duty computation, and the evidentiary value of the test report or certificates were treated as matters for detailed examination at the hearing of the main appeal and not for final determination at the interim stage.

Conclusion: The applicant was entitled to waiver of pre-deposit and stay of recovery during pendency of the appeal.

Ratio Decidendi: In a stay application, where the record discloses a strong prima facie case on limitation and the remaining disputes require full adjudication, pre-deposit may be waived and recovery stayed pending appeal.

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