Pre-deposit relief for crayon-like goods turned on prima facie classification, Modvat credit availability, and an unproved limitation plea.

Waiver of pre-deposit and stay of recovery were considered on the basis of prima facie merits, Modvat credit availability, and limitation. The goods were treated, on the material available, as comparable to an earlier Tribunal product and as having acquired the essential character of crayons, with one sample viewed differently; this supported partial relief. Modvat credit on inputs was also noted as reducing the effective duty exposure. The limitation plea was not accepted prima facie because the permission relied on concerned wax crayons, which were treated as different products, and there was no material showing that the department had been informed that the product in question had come into existence.

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Issues: Whether the appellant was entitled to waiver of pre-deposit and stay of recovery in respect of the duty demand and penalty, having regard to the prima facie merits, availability of Modvat credit, and the plea of limitation.

Analysis: The goods under consideration were found, prima facie, to be comparable to the product dealt with in the earlier Tribunal decision. On the material placed, the goods had acquired the essential character of crayons and could be used as crayons, though one sample was treated differently. The Tribunal also noted that Modvat credit on inputs would be available, reducing the effective duty liability. On limitation, the Tribunal found no prima facie support for the plea because the permission relied upon related to wax crayons, which were treated as different products, and there was no material showing that the department had been informed that the product in question was coming into existence.

Conclusion: The appellant was granted partial relief by waiver of the balance pre-deposit and stay of recovery after directing deposit of half of the reduced duty amount, while the plea on limitation was not accepted prima facie.

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