Pre-deposit waiver and notification eligibility rejected where inputs appeared to be old scrap and suppression was not prima facie disproved.

Eligibility to Notification No. 202/88 was not shown prima facie because the inputs appeared to be old and used scrap, not the specified goods claimed, and the record did not show duty had been borne in the form supplied. The limitation objection also failed at the interim stage, as the purchase records were inconsistent with the inquiry findings and did not displace the extended period based on suppression and misdeclaration. Refusal of cross-examination showed no prima facie legal infirmity. Financial hardship did not justify complete waiver, so only partial interim relief was granted subject to pre-deposit.

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Issues: (i) whether the applicants made out a prima facie case for waiver of pre-deposit and stay by establishing eligibility to Notification No. 202/88; (ii) whether the demand was prima facie barred by limitation in the light of alleged suppression and misdeclaration; (iii) whether refusal of cross-examination disclosed any prima facie legal infirmity; and (iv) whether financial hardship justified complete waiver of pre-deposit.

Issue (i): whether the applicants made out a prima facie case for waiver of pre-deposit and stay by establishing eligibility to Notification No. 202/88.

Analysis: The inputs were found, prima facie, to be scrap and not the specified inputs covered by the notification. The statements of the suppliers indicated that the material supplied was old and used scrap, and the record suggested that duty had not been shown to have been borne on the goods in the form in which they were supplied to the applicants. On this material, the applicants did not establish a prima facie entitlement to the notification benefit.

Conclusion: The prima facie case on eligibility to Notification No. 202/88 was against the applicants.

Issue (ii): whether the demand was prima facie barred by limitation in the light of alleged suppression and misdeclaration.

Analysis: The declarations in the purchase records were inconsistent with the factual position noticed in inquiry. What was stated to be ingots, billets or blooms was found, prima facie, to be old and used scrap. On that basis, the disclosures did not appear to furnish the department with the vital information needed to determine eligibility to the notification, and the invocation of the extended period was not displaced at this stage.

Conclusion: The limitation objection was prima facie against the applicants.

Issue (iii): whether refusal of cross-examination disclosed any prima facie legal infirmity.

Analysis: In the circumstances noticed, the statements of the suppliers were treated as sufficient at the interim stage to support the department's case regarding the nature of the inputs. No prima facie legal infirmity was found in the refusal to permit cross-examination.

Conclusion: No prima facie infirmity was made out on the refusal of cross-examination.

Issue (iv): whether financial hardship justified complete waiver of pre-deposit.

Analysis: The balance sheets showed substantial sales and other income, along with carried-forward balances and profits. The financial position was therefore not viewed as so bleak as to warrant complete waiver of deposit.

Conclusion: The plea for total waiver on financial hardship was rejected.

Final Conclusion: The applications were disposed of by granting only partial interim relief, with pre-deposit of specified amounts and waiver of the balance on deposit, and the appeals were to proceed subject to compliance.

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