Pre-deposit waiver in excise appeals requires prima facie case and undue hardship; conditional stay may protect revenue instead.

Waiver of pre-deposit in an excise appeal depends on the appellant showing a prima facie case and undue hardship; absent both, only conditional stay is justified. On the record before CESTAT, the appellant failed to establish total waiver because the disputed inputs appeared to relate to a second consignment with no fresh supply, and credit had already been taken on the earlier consignment. Financial hardship was also not shown. The Tribunal therefore declined unconditional stay and directed a pre-deposit, with recovery of the remaining duty, interest, and penalties stayed only after compliance.

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Issues: Whether waiver of pre-deposit and unconditional stay could be granted in the pending excise appeal.

Analysis: The Tribunal found that the appellant had not established a sufficient prima facie case for total waiver. In respect of three inputs, the record showed strong material that the invoices were issued for the second consignment without any fresh supply and that the credit had already been taken on the earlier consignment, indicating that the disputed inputs formed part of the stock on which Modvat credit had been availed. The appellant also did not demonstrate financial hardship. Applying the settled principles of prima facie case, balance of convenience, and undue hardship, the Tribunal held that conditional protection alone was justified.

Conclusion: Unconditional stay was declined and the appellant was directed to make a pre-deposit of Rs. 18 lakhs; upon compliance, recovery of the remaining duty, interest, and penalties was stayed during the pendency of the appeal.

Final Conclusion: The interim relief was granted only in a limited form, with the appeal left pending subject to compliance with the ordered pre-deposit.

Ratio Decidendi: In stay matters, waiver of pre-deposit depends on the appellant establishing a prima facie case and undue hardship, failing which conditional deposit may be ordered to protect the revenue.

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