Pre-deposit waiver in classification dispute where prima facie exemption and financial hardship justified interim stay.

Pre-deposit was waived and recovery stayed where the product classification was disputed across Collectorates, creating a prima facie case on the merits. The note records that if the input were treated as bars, the declaration under Rule 57G of the Central Excise Rules, 1944 would already cover it; if treated as flats, the resulting tubes would still fall within Notification No. 202/88-C.E. The revenue was therefore not exposed to jeopardy, and the applicants' financial difficulty also supported interim relief pending disposal of the appeal.

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Issues: Whether pre-deposit of the demanded duty should be waived and recovery stayed pending disposal of the appeal.

Analysis: The product classification was shown to be disputed across Collectorates, and there was a prima facie case that the input might be treated as bars, in which event the declaration under Rule 57G of the Central Excise Rules, 1944 would already cover the input. Even if the input was treated as flats, the resulting tubes would be covered by the exemption under Notification No. 202/88-C.E. dated 20-5-1988, so the revenue was not placed in jeopardy. The applicants also demonstrated financial difficulty.

Conclusion: Pre-deposit was waived and recovery proceedings were stayed pending the appeal in favour of the appellant.

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