Deemed credit dispute: pre-deposit waived and recovery stayed after the supplier's duty liability was fully discharged.

A prima facie case for waiver of pre-deposit arose where the supplier had already discharged the entire duty liability under the Compounded Levy Scheme with interest, weakening the objection that inputs suffered inadequate duty payment. On the material placed, the Tribunal found the demand and penalty arising from denial of deemed credit to be unsustainable at the interim stage, and recovery was stayed pending appeal with pre-deposit of duty and penalty waived.

---

---

Issues: Whether the appellants had made out a prima facie case for waiver of pre-deposit and stay of recovery in respect of the demand and penalty arising from denial of deemed credit.

Analysis: The Tribunal noted the appellants' contention that the supplier had since discharged the entire duty liability under the Compounded Levy Scheme, along with interest, and that the objection based on non-payment of appropriate duty on inputs no longer had merit. On the material placed before it, the Tribunal found a strong prima facie case against the sustainability of the demand.

Outcome: The stay application was allowed and the pre-deposit of duty and penalty was waived, with stay granted on recovery during the pendency of the appeal.

---