Prima facie waiver of pre-deposit limited where chewing tobacco use and independent additional duty exemption were not clearly established.

Prima facie, the applicants did not establish that the mixture could not be used as chewing tobacco or that further processing was necessary to make it chewable, and the record did not clearly show receipt of goods without sale within the firm. On the exemption question, the notification was treated as prima facie creating an independent liability to additional duty, not one automatically covered by the basic duty exemption. Partial waiver of pre-deposit was therefore granted, subject to deposit of Rs. 2.5 lakhs, and recovery of the balance duty and penalty was stayed.

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Issues: Whether the applicants had made out a prima facie case for waiver of pre-deposit of duty and penalty, and whether the notification relied upon prima facie exempted the additional duty as well as the basic duty.

Analysis: The material placed did not prima facie establish that the mixture in question could not be used as chewing tobacco or that additional processes were necessarily required to make it chewable. The record also did not clearly show that the goods were received without sale within the firm. On the exemption issue, the notification was treated prima facie as levying an independent additional duty, not one automatically linked to the basic duty exemption.

Outcome: Partial waiver of pre-deposit was granted on deposit of Rs. 2.5 lakhs within two months, and recovery of the remaining duty and penalty was stayed.

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