Pre-deposit waiver and recovery stay require prima facie merits and financial hardship; only partial interim relief was justified.

Waiver of pre-deposit and stay of recovery at the interim stage depend on a prima facie assessment of the demand and the surrounding financial circumstances. The record, including allegations of fictitious gate passes and a loss statement balanced against substantial sales, was found insufficient to justify complete waiver. Partial relief was therefore considered appropriate, with the appellants directed to make a substantial pre-deposit and the balance duty and penalties kept in abeyance pending disposal of the appeal.

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Issues: Whether the appellants were entitled to waiver of pre-deposit and stay of recovery pending disposal of the appeal.

Analysis: The appeal arose from a demand confirmed on the basis of allegedly fictitious gate passes and imposition of penalties. At the stay stage, the available material was sufficient only for a prima facie assessment. The record did not disclose a strong case for total waiver, and the financial statement showing loss was balanced by substantial sales during the relevant year. On that basis, the appellants were not found to have established complete waiver, but the recovery could be kept in abeyance to the extent directed upon partial deposit.

Conclusion: The appellants were directed to make a pre-deposit of Rs. 8 lakhs, and on such deposit the balance duty and penalties stood waived and recovery stayed pending disposal of the appeal.

Final Conclusion: Interim relief was granted only in part, subject to a substantial pre-deposit, while the appeal on merits remained pending.

Ratio Decidendi: Waiver of pre-deposit and stay of recovery at the interim stage depend on a prima facie assessment of the case and the surrounding financial circumstances, and may be granted only in part where total waiver is not justified.

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