Prima facie case and balance of convenience justified full waiver of pre-deposit and stay of recovery pending appeal.

At the stay stage, the Tribunal examined whether the appellants had shown a strong prima facie case and balance of convenience to justify waiver of pre-deposit and stay of recovery. One view held that the contention that the process did not amount to manufacture could not be rejected interlocutorily, and that prior Tribunal decisions on conversion of rods into wires supported the assessee; the demand was therefore not shown prima facie sustainable. Another view found the case for full waiver insufficient. The third Member agreed with granting early hearing and full waiver. By majority, full waiver of pre-deposit and stay of recovery were granted pending final hearing.

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Issues: Whether the appellants were required to make a pre-deposit of Rs. 15,50,000/- pending appeal, or whether full waiver of pre-deposit and stay of recovery should be granted.

Analysis: The dispute arose at the stay stage, where the Tribunal examined only whether a strong prima facie case and balance of convenience justified waiver. One view held that the plea that the process did not amount to manufacture could not be rejected at the interlocutory stage, that similar tribunal decisions on conversion of rods into wires supported the assessee, and that the demand itself was not shown to be sustainable prima facie. The differing view considered that the assessee had not made out a sufficient case for full waiver. The third Member concurred with the view favouring early hearing and full waiver. By majority, the Bench granted full waiver and stayed recovery pending final hearing.

Conclusion: The appellants were entitled to full waiver of pre-deposit and stay of recovery pending appeal.

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