Pre-deposit waiver in excise stay proceedings turned on prima facie production capacity determination and financial hardship.

In stay and pre-deposit proceedings, the Tribunal found that annual production capacity had been determined from data furnished by the applicant and treated the applicant's letters as opting out of Rule 96ZO(3). On a prima facie basis, the capacity determination was held applicable for the relevant period, and the Tribunal balanced the differential duty and the applicant's financial position by refusing complete waiver. A partial pre-deposit was ordered, and recovery of the balance duty and penalty was stayed on compliance with the deposit direction.

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Issues: Whether, in proceedings for stay and waiver of pre-deposit, the applicant was entitled to complete waiver of duty and penalty and, if not, what amount should be deposited.

Analysis: The annual capacity of production had been determined on the basis of data furnished by the applicant. The applicant's letters were taken as opting out of Rule 96ZO(3), and the prima facie view was that the annual production capacity determination would apply for the relevant period from 1-9-1997 to 31-3-1998. Considering the differential duty involved and the financial position placed before it, the Tribunal found that a partial pre-deposit would balance the rival claims.

Conclusion: Complete waiver was declined. The applicant was directed to deposit Rs. 70,00,000 and, on such deposit, recovery of the balance duty and penalty was stayed.

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