Prima facie limitation defence supports waiver of pre-deposit where approved classification and no wilful suppression were shown.

A prima facie case for waiver of pre-deposit was made out where the goods had been classified under Chapter 26 from 1-3-1988 on an approved classification list claiming exemption, and the department had not objected for a substantial period. In those circumstances, a later demand did not, at the stage of waiver, justify an inference of wilful suppression or misdeclaration. The limitation issue therefore favoured the appellants, and pre-deposit of duty and penalty was waived for hearing of the appeal.

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Issues: Whether the appellants had made out a prima facie case for waiver of pre-deposit of duty and penalty, particularly on the question of limitation and alleged suppression or misstatement.

Analysis: The goods had been classified under Chapter 26 by the appellants from 1-3-1988 under an approved classification list claiming exemption, and the department had not objected to that position for a substantial period. In these circumstances, and considering that the demand was raised only later, the material on record did not, at this stage, justify an inference of wilful suppression or misdeclaration. The appellants therefore established a strong prima facie case on limitation.

Conclusion: Waiver of pre-deposit of duty and penalty was granted in favour of the appellants for hearing of the appeal.

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