Pre-deposit waiver under compounded levy scheme depends on a duly supported abatement claim before the department.

A claim for waiver of pre-deposit under the compounded levy scheme was refused because the applicants had not deposited duty on the last day of the month and could not unilaterally determine abatement for the period of factory closure. The abatement claim had to be pursued before the department through an appropriate application supported by material evidence. On that basis, complete waiver of pre-deposit was not justified, and partial deposit was directed as a condition for waiver of the remaining duty demand and penalty during the appeal.

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Issues: Whether the applicants made out a prima facie case for waiver of pre-deposit of the duty and penalty demand, in the context of an abatement claim under the compounded levy scheme.

Analysis: The applicants were required to deposit duty on the last day of the month, which had not been done. The abatement claim for the period during which the factory remained closed had to be pursued before the department by making an appropriate application supported by material, and could not be unilaterally determined by the applicants. On that basis, the case for complete waiver of pre-deposit was not made out.

Conclusion: The applicants were not entitled to waiver of the entire pre-deposit. They were directed to deposit a further amount of Rs. 1,00,000, and on such compliance the remaining duty demand and the entire penalty stood waived and recovery remained stayed during the appeal.

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