Prima facie repair versus manufacture dispute defeated complete pre-deposit waiver in a duty demand stay application.

In a stay application arising from a demand under Rule 173H, the tribunal examined whether the appellants had shown a prima facie case for complete waiver of pre-deposit. The record indicated that defective goods were dismantled, parts replaced, and the goods reassembled, making it arguable whether the process was repair of the original goods or manufacture of fresh goods, with the original identity appearing lost. As the issue could not be resolved conclusively at the stay stage and the applicants were absent, complete waiver was not justified. The appellants were required to deposit the entire duty for hearing of the appeal, while deposit of penalty was waived and its recovery stayed.

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Issues: Whether, in a stay application arising from a demand under Rule 173H, the appellants had made out a prima facie case for complete waiver of pre-deposit and stay of recovery.

Analysis: The goods received back as defective were dismantled, the defective parts were replaced, and the goods were reassembled. On the record, it was arguable whether the process amounted to repair of the original goods or to manufacture of fresh goods, and the original identity of the goods appeared to have been lost. In the absence of the applicants and with no material sufficient to settle the issue at the stay stage, a prima facie case for complete waiver was not established.

Conclusion: The appellants were directed to deposit the entire duty amount as a pre-condition for hearing of the appeal, and on such deposit the requirement of depositing the penalty stood waived and recovery of the penalty was stayed.

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