Prima facie limitation and departmental knowledge justified unconditional waiver of pre-deposit and stay of recovery.

Prima facie limitation supported unconditional waiver of pre-deposit and stay of recovery, because the declarations under Rule 173B and Rule 57G did not require express disclosure that the work was done as a job worker. The record also showed departmental knowledge of the invoices and clearance pattern well before the show cause notice, including correspondence and queries made in 1996. On that basis, the allegation that the applicants had concealed facts was not made out at the prima facie stage, and the limitation plea disclosed a strong case.

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Issues: Whether the applicants were entitled to unconditional waiver of pre-deposit and stay of recovery on the ground that the demand was prima facie barred by limitation.

Analysis: The declarations under Rule 173B and Rule 57G did not require a specific disclosure that the manufacturing activity was undertaken as a job worker. The record also showed that the department had knowledge of the invoices and the manner of clearance well before the show cause notice, including correspondence and queries made in 1996. In these circumstances, the allegation that the applicants had kept the department in the dark was not made out at the prima facie stage, and the plea of limitation disclosed a strong case.

Conclusion: The applicants were entitled to unconditional waiver of pre-deposit and stay of recovery.

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