Pre-deposit waiver and recovery stay granted where connected Supreme Court proceedings could affect the excise appeal.

Pre-deposit of confirmed duty and penalty was waived and recovery was stayed pending appeal because the dispute was materially linked to connected proceedings already before the Supreme Court. The application arose from a Central Excise demand alleging removal of inputs to an adjacent 100% EOU and misstatement of production as having taken place in the appellant's unit. The pending Supreme Court proceedings in the connected EOU matter were treated as capable of affecting the appeal, so interim protection was granted until disposal of the appeal.

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Issues: Whether pre-deposit of the confirmed duty and penalty should be waived and recovery stayed pending appeal, in view of the connected proceedings before the Supreme Court.

Analysis: The application arose from a demand confirmed under the Central Excise regime, including duty, penalty and interest, on the allegation that inputs on which credit had been taken were removed to an adjacent 100% EOU and the production was reflected as if manufactured in the appellant's unit. A separate proceeding concerning the connected EOU unit was already before the Supreme Court, and interim stay had been continued there. The pending Supreme Court proceedings were considered materially linked to the present dispute and capable of affecting the issue in appeal.

Conclusion: Pre-deposit was waived and recovery of the duty and penalty was stayed pending disposal of the appeal.

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