Pre-deposit waiver principles: excise duty deposit maintained, while customs duty deposit was waived on a prima facie case.

A pre-deposit for central excise duty was not reduced because the request was founded on exemption notifications not expressly pleaded in the stay application, so the existing direction was maintained with only time granted to pay the balance. For the customs duty component, a prima facie case was accepted on the basis of an earlier ruling that customs duty was not prima facie leviable on inputs used in manufacture where duty was demanded on the final product, and pre-deposit and recovery of that amount were waived. Financial hardship was recognised only to the limited extent of extending time for compliance with the remaining excise duty deposit.

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Issues: Whether the pre-deposit direction could be modified by reducing the amount directed to be deposited towards central excise duty and by granting waiver of pre-deposit in respect of the amount directed towards customs duty.

Analysis: The claim for reduction of the central excise duty pre-deposit was based on exemption notifications that had not been expressly pleaded in the stay application, and the Tribunal held that such a claim could not be entertained at that stage to reduce the amount already directed to be pre-deposited. However, in relation to the customs duty component, the Tribunal found that the appellant had relied on the earlier decision in Sanjari Twisters and had made out a prima facie case that, where duty was demanded on the final product, customs duty was not prima facie leviable on the inputs used in manufacture. The plea of financial hardship was also accepted only to the limited extent of granting time for compliance with the remaining excise duty pre-deposit.

Conclusion: The direction to pre-deposit the central excise duty amount was maintained subject to payment of the balance within the time granted, while the pre-deposit and recovery of the customs duty amount were waived.

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