Exemption notifications for naval supplies supported waiver of pre-deposit where no evidence disproved shipboard use of paints.

Waiver of pre-deposit of duty and penalty was justified because the notices did not produce evidence that the paints supplied to the Indian Navy were not used on board a naval ship. The supply was supported by certificates issued by the naval authority for purchase for such supply, and the exemption notifications did not require an end-use certificate. On a prima facie view, the benefit of the notifications applied, and the attempted distinction between "use" and "consumption" was not material at that stage. Recovery was stayed.

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Issues: Whether waiver of pre-deposit of duty and penalty was justified where the exemption notifications were claimed in respect of paints supplied to the Indian Navy.

Analysis: The notices did not disclose any evidence to support the allegation that the goods were not used on board a naval ship. The supply was supported by certificates issued by the naval authority for purchase for such supply, and the notifications did not require an end-use certificate. On a prima facie view, the benefit of the notifications would apply, and the attempted distinction between "use" and "consumption" was not material at this stage.

Conclusion: Waiver of pre-deposit of duty and penalty was granted and recovery was stayed.

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