Pre-deposit waiver in export-linked excise dispute limited to partial relief after prima facie entitlement was not shown.

A claim for complete waiver of pre-deposit under Rule 19(2) and Notification No. 43/2001-C.E. (N.T.) failed because no prima facie entitlement was shown on the asserted export-use basis. The alternative contention that Rule 5 of the Cenvat Credit Rules, 2002 supported refund of the duty demand in respect of inputs was also found unsupported. The Tribunal therefore declined full stay of recovery, but granted limited interim relief by directing a partial pre-deposit of Rs. 10 lakhs and staying recovery of the balance duty and penalty on compliance.

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Issues: Whether the appellant had made out a prima facie case for waiver of pre-deposit and stay of recovery, and whether full waiver could be granted under Rule 19(2) of the Central Excise Rules, 2002 read with Notification No. 43/2001-C.E. (N.T.) dated 26-6-2001.

Analysis: The appellant claimed the benefit of Rule 19(2) and the notification on the footing that the final product was used in export manufacture by the buyer. The Tribunal held that this contention could not be accepted prima facie. It further found no support in Rule 5 of the Cenvat Credit Rules, 2002 for the alternative claim that the duty demand would be refundable to the appellant in respect of the inputs. On the question of interim relief, the Tribunal took a lenient approach and declined to insist on full pre-deposit, instead directing a partial pre-deposit of Rs. 10 lakhs within the stipulated time.

Conclusion: The appellant was not held entitled to full waiver of pre-deposit, but was granted partial interim relief by being required to pre-deposit only Rs. 10 lakhs, with stay of recovery of the balance duty and penalty on compliance.

Final Conclusion: The interim application was granted only to a limited extent, and the appellant obtained partial protection against recovery subject to compliance with the pre-deposit direction.

Ratio Decidendi: A claim for complete waiver of pre-deposit cannot be granted where no prima facie entitlement is shown under the invoked export exemption and the alternative statutory basis for refund is also unsupported; in such a case, only partial interim relief may be ordered.

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