Prima facie challenge to duty demand and procedural infirmity justified waiver of pre-deposit and stay of recovery.

Waiver of pre-deposit and stay of recovery were granted where the duty demand arose from re-classification of goods and the applicants showed a prima facie case that the assessments were final, not provisional. The record also indicated that the second show cause notice for differential duty was issued before the first reclassification proceeding had concluded, creating a procedural infirmity in the demand. On that basis, the period for differential duty was treated as limited and interim protection was justified.

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Issues: Whether waiver of pre-deposit and stay of recovery of the confirmed duty demand should be granted in view of the nature of the assessment and the procedural infirmity in the demand.

Analysis: The application concerned duty confirmed on re-classification of the product. The record showed that the department itself proceeded on the basis of provisional assessment, while the applicants contended that the assessments were final. The order also noted that the second show cause notice for differential duty was issued before the first reclassification proceeding had been concluded, which rendered the demand procedurally irregular. On the material placed, a prima facie case was found that the assessments were final and that the period for differential duty was therefore limited, and the legal infirmity in the proceedings supported interim protection.

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

Final Conclusion: Interim relief was allowed because the appellants showed a prima facie case and the demand proceedings suffered from legal infirmity.

Ratio Decidendi: A prima facie challenge to the basis and legality of a duty demand can justify waiver of pre-deposit and stay where the recovery proceedings are procedurally infirm.

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