Pre-deposit waiver and financial hardship must be substantiated; partial relief may follow a valuation dispute.

A request for full waiver of pre-deposit was rejected because the appellant failed to substantiate undue financial hardship with supporting material such as balance sheets or evidence of loss. The Tribunal nevertheless considered the valuation dispute and the reduced duty exposure on the appellant's own valuation, and therefore granted only partial relief by fixing a lower pre-deposit. Upon deposit of the specified amount, recovery was stayed, while the penalty was waived for the time being.

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Issues: Whether the appellant was entitled to waiver of pre-deposit and stay of recovery pending appeal, and whether the circumstances disclosed undue financial hardship sufficient to dispense with deposit.

Analysis: The appeal concerned excise duty on goods manufactured by the appellant and captively used in its research and development section. The Tribunal noted that the appellant had not produced supporting evidence for its asserted financial difficulty, such as the relevant balance sheet or other material to substantiate the claim of loss. In the absence of evidence, the plea of undue hardship was not accepted. At the same time, the Tribunal took into account the valuation dispute and the fact that the duty demand, on the appellant's own valuation, would be substantially lower than the amount originally demanded, and therefore fixed a reduced pre-deposit amount.

Conclusion: Waiver of pre-deposit in full was denied, but the appellant was directed to deposit Rs. 4 lakhs within six weeks and, upon such deposit, recovery was stayed; the penalty was waived for the time being.

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