Prima facie waiver of pre-deposit granted where freight, tax deductions and bank charges were supported by evidence and circular guidance.

Prima facie evidence from Chartered Accountant certificates, the Board circular on equalised freight in multi-product and multi-locational factories, and the accepted departmental practice justified waiver of pre-deposit. The Tribunal also noted partial payment, a furnished bank guarantee, and a possible reduction in demand on verification of a calculation error, which supported stay protection. Bank charges were treated as a relevant deduction on the strength of Supreme Court authority. On these materials, the appellants were held to have made out a prima facie case, the pre-deposit of duty and penalty was dispensed with, recovery was stayed, and the bank guarantee was ordered to remain alive during the appeal.

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Issues: Whether the appellants had made out a prima facie case for waiver of pre-deposit of duty and penalty and for stay of recovery pending appeal; whether the amounts claimed towards freight, turn-over tax, sales tax, bank charges and transit damage were eligible for consideration at the stay stage.

Analysis: The Tribunal noted reliance on the Board circular regarding equalised freight in multi-product and multi-locational factories, and treated Chartered Accountant's certificates as prima facie evidence of actual payment of turn-over tax, equalised freight and sales tax. It also took note of the departmental position that such certificates were being accepted in some cases, the partial payment already made, the bank guarantee furnished, and the contention that the demand might reduce on verification of a calculation mistake. Reference was also made to the Supreme Court authority allowing deduction of bank charges for collection of sales proceeds.

Outcome: The appellants were held to have made out a prima facie case for waiver. The requirement of pre-deposit of duty and penalty was dispensed with, the bank guarantee was directed to be kept alive during the pendency of the appeal, and recovery was stayed.

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