Prima facie limitation defence justified waiver of pre-deposit and stay of recovery pending appeal.

Pre-deposit of duty and penalty was waived and recovery stayed pending appeal where the assessee raised a prima facie limitation defence against a demand issued under the extended limitation period for alleged suppression. The assessee relied on a contemporaneous trade notice and a bona fide belief about exemption eligibility, and the record indicated that neither side appeared aware of the municipal notification during the relevant period. Those circumstances supported interim protection, especially given the large demand and the assessee's status as a women's co-operative society.

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Issues: Whether pre-deposit of the duty and penalty should be waived and recovery stayed pending disposal of the appeal, having regard to the assessee's prima facie plea on limitation and the circumstances of the case.

Analysis: The notice and adjudication involved a substantial demand raised under the extended limitation period on the allegation of suppression. The assessee relied on the contemporaneous trade notice and asserted bona fide belief regarding eligibility to exemption, while the record showed that neither side appeared to have been aware of the municipal notification for the relevant period. On that basis, a prima facie case was found on limitation. The amount involved was very large, and the assessee was a women's co-operative society, making interim protection appropriate pending final hearing.

Conclusion: Waiver of pre-deposit and stay of recovery were granted in favour of the assessee pending the appeal.

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