Partial pre-deposit in penalty stay matters depends on a weak prima facie case and unproven financial hardship.

In a stay application arising from a penalty for alleged clandestine removal of excisable goods, the Tribunal held that a limited pre-deposit was warranted because the appellants had not shown a strong prima facie case and their claim of financial hardship was not convincingly established. Voluntary payment of duty and the continued functioning of the unit weighed against full waiver. The balance penalty was protected from recovery during the pendency of the appeal once the specified deposit was made.

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Issues: Whether the appellants should be directed to make a pre-deposit of part of the penalty and be granted waiver and stay of recovery of the balance pending disposal of the appeal.

Analysis: The appeal arose from a penalty imposed for alleged clandestine removal of excisable goods. The duty had already been paid voluntarily, and the appellants relied on their financial condition and reference to BIFR. The Tribunal found that no strong prima facie case on merits was shown, and that the unit was still functioning without demonstrated impairment from financial stringency. In these circumstances, a limited pre-deposit was considered appropriate, with protection against recovery of the balance amount during the pendency of the appeal.

Conclusion: The appellants were directed to deposit Rs. 75,000 as part of the penalty, and on such deposit the balance penalty was waived and recovery stayed till disposal of the appeal.

Ratio Decidendi: In a stay matter, where the appellant does not establish a strong prima facie case and financial hardship is not shown convincingly, the Tribunal may require a partial pre-deposit and grant waiver of recovery only for the balance pending appeal.

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