Section 11D pre-deposit waiver granted where no prima facie excess recovery from customers was alleged.

In a stay application before CESTAT, Mumbai, the applicants sought waiver of pre-deposit of duty demanded under Section 11D(1) of the Central Excise Act and suspension of recovery pending appeal. The Tribunal noted that there was no allegation that the applicants had recovered any amount from customers over and above 8% of the price of the exempted final products, and therefore held that there was prima facie no contravention of Section 11D. Relying on Nu-Wave Shoes, the Tribunal granted waiver of pre-deposit and stayed recovery of the duty demand until disposal of the appeal.

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Issues: Whether the applicants were required to make pre-deposit of the demanded duty under Section 11D(1) of the Central Excise Act, 1944 and whether recovery of the demand should be stayed pending appeal.

Analysis: The application for retention of the appeal was allowed. On the merits of the stay application, the order records that there was no allegation that the applicants had charged any amount over and above 8% of the price of the exempted final products from customers, and therefore, prima facie, there was no contravention of Section 11D. Reliance was placed on the Tribunal's decision in Nu-Wave Shoes.

Outcome: Waiver of pre-deposit was granted and recovery of the duty demand was stayed pending disposal of the appeal.

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