Pre-deposit waiver for excise penalty rejected despite hardship, as duty default during forfeiture period attracted stricter payment rules.

Waiver of pre-deposit for penalty under the excise framework was declined where duty had been defaulted during the period when fortnightly payment facility stood withdrawn and clearances in that forfeiture period had to be paid through PLA rather than the Cenvat account. Although financial hardship was supported by records showing sickness and losses, the Bench preferred the later coordinate-bench view on the penal consequences of the default and noted that even the cited stay order had required a penalty deposit. Complete waiver was therefore refused, and the appellants were directed to pre-deposit the full penalty within the stipulated time.

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Issues: Whether the appellants were entitled to waiver of the pre-deposit requirement in respect of the penalty, in view of the pleaded financial hardship and the applicable excise procedural rules.

Analysis: The appellants had defaulted in payment of duty during the period when the fortnightly payment facility stood withdrawn, and the relevant excise rules required duty on clearances during the forfeiture period to be paid through PLA and not through the Cenvat account. The order also noted the conflicting stay-related precedents relied upon by the parties, but preferred the later coordinate-bench view emphasising penal consequences for such default. Financial hardship was accepted as established from the record, including the sickness declaration and loss figures, yet the Bench found that the circumstances did not justify complete waiver of the statutory pre-deposit, particularly as even the cited stay order had required deposit of penalty.

Conclusion: The request for complete waiver was rejected, and the appellants were directed to pre-deposit the entire penalty amount within the stipulated time.

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