Pre-deposit waiver in excise stay proceedings requires prima facie case and hardship; partial relief was granted on conditional terms.

Complete waiver of pre-deposit was refused in stay proceedings where the demand arose from finalisation of assessable value with additions towards overheads. The Tribunal held that the settlement claim under the KVSS could not be accepted at that stage because it related to a different expense head and the present demand had not arisen when the settlement was made. As provisional assessment had been ordered under Rule 9(B) of the Central Excise Rules, 1944, and the working of overheads, cost audit material, and payments required detailed examination in the appeal, only partial relief was justified. In the absence of a prima facie case and financial hardship, conditional pre-deposit was directed.

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Issues: Whether the appellants were entitled to complete waiver of pre-deposit and stay of recovery pending appeal.

Analysis: The demand arose from finalization of assessable value with additions towards overheads. The claim based on settlement under the KVSS was not accepted at this stage, as the settlement related to a different expense head and the present demand had not been made at the material time. The record also showed that provisional assessment had been specifically ordered under Rule 9(B) of the Central Excise Rules, 1944. The challenge to the manner of working out overheads, the cost audit material, and the extent of payments made was held to require detailed examination in the appeal. On the stay application, no case of complete waiver or financial hardship was made out.

Conclusion: Complete waiver of pre-deposit was declined. The appellants were directed to pre-deposit 25% of the disputed duty amount in cash and another 25% by bank guarantee, with the balance stayed subject to compliance.

Ratio Decidendi: In stay proceedings, complete waiver of pre-deposit is not warranted unless a prima facie case and financial hardship are shown; where detailed examination of the merits is still required, the Tribunal may grant only partial waiver on conditions.

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