Prima facie exemption claim and sick-industry status justified waiver of pre-deposit for processed cotton fabrics.

Waiver of pre-deposit of duty and penalty was granted where the exemption claim for processed cotton fabrics was found prima facie arguable. The order also noted that the goods, at the time of clearance, were not plainly non-duty-paid goods wholly outside the duty net. The applicant's status as a sick industry was treated as a relevant factor in granting interim relief, and pre-deposit of duty and penalty was waived in favour of the assessee.

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Issues: Whether waiver of pre-deposit of duty and penalty was justified.

Analysis: The demand arose from processed cotton fabrics and the exemption claim under the relevant notification was considered prima facie arguable. The order also noted that the goods, when cleared, were not obviously non-duty-paid goods wholly outside the duty net, and further took into account the applicant's status as a sick industry before considering interim relief.

Conclusion: The pre-deposit of duty and penalty was waived in favour of the assessee.

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