Depot valuation under Central Excise rules can justify refusal of full pre-deposit waiver where prima facie case is weak.

Rule 7 of the Central Excise Valuation Rules, 2000 applies where excisable goods are not sold at the factory gate but are transferred to a depot for sale, in which case valuation may be based on the normal transaction value of comparable goods sold from that depot at or about the same time. In a stay application concerning clearances made both from the factory gate and from a depot, the tribunal found that the appellant had not made out a prima facie case for complete waiver of pre-deposit. Full waiver was therefore declined, while partial relief was granted by directing deposit of a specified amount and staying recovery of the balance during the appeal.

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Issues: Whether, in a dispute concerning valuation of excisable goods cleared partly from the factory gate and partly from a depot, the appellant was entitled to complete waiver of pre-deposit.

Analysis: Rule 7 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 applies where excisable goods are not sold at the time and place of removal but are transferred to a depot or other place from which they are sold, in which event valuation is to be based on the normal transaction value of comparable goods sold from such other place at or about the same time. Since the goods were cleared both from the factory gate and from the depot, the appellant's contention that depot sales were irrelevant did not establish a prima facie case for total waiver of pre-deposit.

Conclusion: Complete waiver of pre-deposit was declined, but partial relief was granted by directing deposit of a specified amount and staying recovery of the balance during pendency of the appeal.

Final Conclusion: The application for stay was allowed only to a limited extent, with conditional relief against recovery of the remaining demand.

Ratio Decidendi: Where depot clearances are involved, Rule 7 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 may justify valuation on the basis of depot transaction value, and absence of a prima facie case can warrant denial of full waiver of pre-deposit.

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