Prima facie exemption eligibility under Notification No. 175/86 supported waiver of pre-deposit and stay of recovery pending appeal.

Prima facie eligibility for exemption under Notification No. 175/86 was accepted despite use of a foreign brand name, because the Tribunal noted conflicting views on whether such use disqualifies the assessee only when the brand owner is in India. On that prima facie basis, and in light of divergent Tribunal decisions, pre-deposit of duty and penalty was waived and recovery of the disputed amounts was stayed pending appeal.

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Issues: Whether pre-deposit of duty and penalty should be waived and recovery stayed pending appeal where the assessee claimed prima facie eligibility to exemption under Notification No. 175/86 notwithstanding use of a foreign brand name.

Analysis: The Tribunal noted that there were divergent views on the effect of using a foreign manufacturer's brand name for the purpose of the notification. Relying on its earlier prima facie view that the notification was intended to deny the benefit only where the brand owner himself was in India and otherwise disentitled, the Tribunal held that the appellant had made out a prima facie case. In view of that prima facie position and the existence of conflicting Tribunal decisions, the request for interim protection was accepted.

Conclusion: Waiver of pre-deposit of duty and penalty was granted and recovery of the disputed amounts was stayed pending appeal.

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