Pre-deposit waiver and stay of recovery granted where the demand was distinct and refund appropriation lacked legal sanction.

Waiver of pre-deposit and stay of recovery were granted for the balance demand because the Tribunal found the appealed demand distinct from the cited precedents and noted that the show cause notice had not invoked Rule 57CC or Rule 57AD. It also held that the refund amount appropriated by the Assistant Commissioner was taken without legal sanction, but for the limited purpose of Section 35F that amount could be retained by the department until final disposal of the appeal.

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Issues: Whether the appellant was entitled to waiver of pre-deposit and stay of recovery, and whether the amount already appropriated from the refund could be retained by the department for purposes of Section 35F.

Analysis: The Tribunal noted that the demand now under appeal was different from the demands dealt with in the cited precedents and that the show cause notice did not invoke Rule 57CC or Rule 57AD. It also found that the Assistant Commissioner had appropriated the refund amount of Rs. 40 lakhs towards the requantified demand without legal sanction. For the limited purpose of Section 35F, the Tribunal treated that amount as one that could be retained by the department till final disposal of the appeal.

Conclusion: Waiver of pre-deposit and stay of recovery were granted for the balance amount, while the department was permitted to retain the appropriated refund amount pending final disposal.

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