Pre-deposit waiver limited where no strong prima facie case was shown; partial Cenvat credit reversal secured stay.

Waiver of complete pre-deposit was denied because the appellant failed to establish a strong prima facie case, and the precedents cited were found distinguishable on their facts. The Tribunal noted that a substantial part of the demand related to the period before amendment of Section 5A of the Central Excise Act and that the plea regarding possible refund of Cenvat credit required fuller examination at the final hearing. The appellant was directed to reverse part of the Cenvat credit within four weeks, and on compliance the balance pre-deposit was waived and recovery of the remaining demand, interest and penalty was stayed during the appeal.

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Issues: Whether, in the circumstances of the case, waiver of pre-deposit of the confirmed demand, interest and penalty should be granted pending the appeal, and if so to what extent.

Analysis: The Tribunal found that the precedents relied upon by the appellant did not advance the case materially on the facts, since the cited decisions involved payment of duty on clearance of goods or other distinguishable situations. It also noted that the substantial part of the demand related to a period prior to the amendment of Section 5A of the Central Excise Act, 1944, and that the plea of possible refund of Cenvat credit required fuller examination at the final hearing. On the facts, the appellant was held not to have established a strong prima facie case for complete waiver.

Conclusion: The appellant was directed to reverse Cenvat credit of Rs. 7 lakhs within four weeks, and on such compliance, pre-deposit of the balance amount was waived and recovery of the remaining demand, interest and penalty was stayed during the pendency of the appeal.

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