Pre-deposit waiver and duty-payment defaults under Rule 173G led to only partial relief, not complete waiver.

A prima facie reading of Rule 173G showed that where a manufacturer forfeited the fortnightly instalment facility for two months, duty for each consignment had to be paid by debit to the account current and the Cenvat credit facility was not available. The Tribunal also considered the claimed financial hardship, including the balance sheet and alleged sickness before BIFR, but found that substantial sales income undermined the case for complete waiver. Partial relief was therefore justified rather than total waiver of pre-deposit, with stay of recovery pending appeal subject to deposit of Rs. 10 lakhs and waiver of the remaining duty and penalty.

---

---

Issues: Whether the applicant had made out a prima facie case for total waiver of pre-deposit of duty and penalty, and whether financial hardship justified complete waiver.

Analysis: The application arose from a demand based on default in the fortnightly duty payment scheme under Rule 173G of the Central Excise Rules. On a prima facie reading of clauses (b) and (e), the facility to discharge duty through Cenvat credit was not available where the manufacturer had forfeited the instalment facility for two months, and duty for each consignment had to be paid by debit to the account current. The Tribunal also examined the financial position shown by the balance sheet and the claim of sickness before BIFR, but found that the company had substantial sales income and that complete waiver would not be justified.

Conclusion: No case was made out for total waiver of pre-deposit. Partial waiver was granted on condition of deposit of Rs. 10 lakhs, with waiver of the balance duty and penalty and stay of recovery pending the appeal.

---