Small scale exemption claim and collateral evidence justified waiver of pre-deposit where clearances stayed below the limit.

Pre-deposit of duty and penalty was dispensed with where the appellant claimed small scale exemption and placed collateral material showing that clearances had not crossed the exemption limit. Although the appellant had not maintained private production records, that lapse was not treated as fatal because the value of clearances could still be assessed from sales tax returns and other supporting evidence. In the absence of evidence establishing clearances above the threshold, the appellant was found to have a good prima facie case, and the stay petition was allowed unconditionally.

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Issues: Whether pre-deposit of duty and penalty should be dispensed with in view of the claim of small scale exemption and the material placed to show that clearances had not crossed the exemption limit.

Analysis: The appellant's failure to maintain private records of production was noticed, but it was held that this lapse could not, by itself, defeat the claim when the value of clearances could be assessed from collateral evidence. Sales tax returns and other supporting material indicated that the total clearances were below the exemption threshold. In the absence of evidence showing clearances above the limit, the appellant was found to have a good prima facie case.

Outcome: The prayer for dispensing with pre-deposit was accepted and the stay petition was allowed unconditionally.

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