Pre-deposit waiver allowed where departmental deposit covered duty demand and penalty under Section 11AC was prima facie doubtful.

Waiver of pre-deposit and stay of recovery were granted because the amount already lying with the department covered almost the entire confirmed duty demand, making further deposit unnecessary at the prima facie stage. The imposition of penalty under Section 11AC of the Central Excise Act also appeared doubtful, as earlier proceedings had not led to a mandatory penalty under that provision. On those facts, the existing deposit was treated as sufficient compliance with Section 35F, and the assessee's applications for waiver and stay were allowed.

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Issues: Whether the assessee was entitled to waiver of pre-deposit and stay of recovery of duty and penalty pending appeal.

Analysis: The amount already lying with the department was substantial and covered almost the entire confirmed duty demand. The earlier proceedings had not resulted in mandatory penalty under Section 11AC of the Central Excise Act, yet such penalty was imposed in the impugned order, which gave rise to a prima facie doubt on that part of the order. In these circumstances, the pre-deposit already available with the department was treated as sufficient compliance with Section 35F.

Conclusion: The applications for waiver of pre-deposit and stay were allowed in favour of the assessee.

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