Pre-deposit waiver in turbine exemption dispute: partial relief granted while classification and limitation issues await full appeal review

Waiver of pre-deposit and stay of recovery were sought in a classification and exemption dispute involving turbine parts cleared from the factory and bought-out items sent directly to the site. The Tribunal treated the central question as whether these clearances amounted to supply of a turbine in CKD condition for exemption purposes, noting that the issue could be examined fully only in the main appeal. It found no prima facie case for complete waiver of duty and penalty, but accepted a prima facie limitation point. In light of the record on financial hardship, complete dispensation was refused and partial pre-deposit relief was allowed, with stay of recovery for the balance.

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Issues: Whether waiver of pre-deposit and stay of recovery should be granted in a dispute concerning classification and exemption benefit for turbine parts cleared from the factory and bought-out items sent directly to site.

Analysis: The arguable question was whether clearance of a few parts from the factory, together with direct dispatch of bought-out items to the customer's site, amounted to clearance of a turbine in CKD condition for the purpose of exemption. The Tribunal noted that this issue could be examined only at the stage of the main appeal. It further found that the appellants had not established a prima facie case for complete waiver of duty and penalty, though a prima facie case was made out on limitation. On financial hardship, the material on record did not justify full dispensation from pre-deposit, but supported partial relief.

Conclusion: Complete waiver was declined, but partial waiver of pre-deposit was granted on deposit of Rs. 50 lakhs, with stay of recovery of the balance during pendency of the appeals.

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