Limitation issue under central excise rules supported waiver of pre-deposit and stay of recovery pending appeal.

A strong prima facie case justified waiver of pre-deposit and stay of recovery pending appeal where the demand covered a period beyond six months and the limitation issue under Section 11A of the Central Excise Act, as applied to Rule 196 and Rule 223A of the Central Excise Rules, had already been referred to a Larger Bench. On that basis, interim relief was granted and the duty and penalty deposit requirement was dispensed with until the appeal was decided.

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Issues: Whether the appellant was entitled to waiver of pre-deposit and stay of recovery pending appeal in view of the limitation issue referred to the Larger Bench.

Analysis: The demand had been confirmed for a period beyond six months, and the question whether the limitation prescribed under Section 11A of the Central Excise Act could be read into Rule 196 and Rule 223A of the Central Excise Rules was already referred to a Larger Bench. In that circumstance, the appellant was found to have made out a strong prima facie case for interim relief.

Conclusion: The requirement of pre-deposit of duty and penalty was waived and recovery was stayed pending disposal of the appeal, in favour of the appellant.

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