Pre-deposit waiver in stay applications may be denied for duty absent prima facie case or hardship, while penalty relief is selectively granted.

In a stay application before CESTAT, unconditional waiver of pre-deposit of duty and equal penalty was sought, but no strong prima facie case for complete waiver was shown. The products were treated as prima facie distinct, and the duty demand was considered low enough that financial hardship was not established, so pre-deposit of the duty amount was directed. Relief was nonetheless granted on the penalty component, which was stayed and dispensed with. The application was therefore allowed only to the extent of waiving the penalty deposit while requiring pre-deposit of duty.

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Issues: Whether waiver of pre-deposit of duty and penalty was warranted in the stay application.

Analysis: The appeal involved a claim for unconditional dispensation of pre-deposit of duty and equal penalty. The products were found prima facie to be distinct, and the appellant was held not to have made out a strong prima facie case for complete waiver. Since the duty demand was stated to be on the lower side and not likely to cause financial hardship, pre-deposit of the duty amount was directed. At the same time, the penalty component was dispensed with and its recovery stayed.

Conclusion: Waiver of pre-deposit was refused as to duty and allowed as to penalty.

Final Conclusion: The stay application was allowed only to the limited extent of granting relief from the penalty deposit, while insisting on pre-deposit of the duty amount.

Ratio Decidendi: In a stay application, pre-deposit may be directed where no strong prima facie case or financial hardship is shown, while ancillary relief may still be granted selectively on the facts of the case.

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