Pre-deposit waiver in duty dispute limited where Modvat credit was not prima facie established and compliance was lacking.

Repeated non-appearance before the adjudicating authority, failure to file a reply to the show cause notice, and lack of prima facie material supporting Modvat credit weighed against a total waiver of pre-deposit. Financial hardship and the surrounding circumstances were nevertheless considered in fixing the pre-deposit requirement. Total waiver was declined, but partial waiver was allowed subject to deposit of the specified amount within time, with the balance duty and entire penalty waived and recovery stayed on compliance.

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Issues: Whether the appellants were entitled to total waiver of the pre-deposit of duty and penalty in the stay application.

Analysis: The record showed repeated non-appearance before the adjudicating authority, failure to file any reply to the show cause notice, and absence of material to prima facie establish the admissibility of the Modvat credit claimed. At the same time, the financial hardship pleaded by the appellants and the circumstances of the case were taken into account while considering the extent of pre-deposit required under the governing provision.

Outcome: Total waiver of pre-deposit was declined, but partial waiver was granted on condition of depositing Rs. 3.5 lakhs within the stipulated time, with waiver of the balance duty and entire penalty and stay of recovery upon compliance.

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