Pre-deposit waiver in tax disputes depends on prima facie case and proven hardship; partial deposit granted, balance stayed.

A stay application before CESTAT examined whether the appellant had shown a prima facie case for complete waiver of pre-deposit of duty and penalty, and whether financial hardship justified dispensing with further deposit. The Tribunal found that the limitation plea was not accepted at the stay stage because the demand arose after receipt of the later laboratory report. It also held that financial hardship was supported only by an affidavit and no further evidence. On those facts, the appellant was not entitled to full waiver, and was directed to make a partial pre-deposit, after which the balance duty and penalty stood waived and recovery remained stayed pending appeal.

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Issues: Whether the appellant had made out a prima facie case for waiver of the entire pre-deposit of duty and penalty in a stay application, and whether financial hardship justified dispensing with further deposit.

Analysis: The demand arose after receipt of the later laboratory report, and the plea of limitation was not accepted at the stay stage. The Tribunal also found that the plea of financial hardship was supported only by an affidavit and no further evidence. On the facts, the appellant was held not to have established a case for complete waiver of pre-deposit.

Outcome: The appellant was directed to deposit Rs. 10,00,000 within 12 weeks, and on such deposit the balance duty and penalty were waived and recovery was stayed till disposal of the appeal.

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