Pre-deposit waiver under Central Excise law turns on prima facie case, undue hardship, and revenue protection; partial relief granted.

Waiver of pre-deposit under section 35F of the Central Excise Act was refused for appellants 1 to 3 because the record prima facie supported the revenue's allegation of Cenvat credit being taken on HR coils without actual use in manufacture, reinforced by section 14 statements and surrounding circumstances. The Tribunal held that they had not established a prima facie case for complete waiver and that section 35F requires consideration of both undue hardship and protection of revenue; they were directed to make a substantial pre-deposit, with partial waiver and stay on compliance. For appellants 4 and 5, who were only cutters and were not alleged to have sold the coils or passed on the credit, pre-deposit of penalty was waived and recovery stayed.

---

---

Issues: Whether waiver of pre-deposit under section 35F of the Central Excise Act, 1944 was warranted in the light of the appellants' prima facie case and undue hardship.

Analysis: For appellants 1 to 3, the materials on record were found to prima facie support the revenue's allegation that Cenvat credit had been taken on HR coils without their actual use in manufacture, with corroboration from statements recorded under section 14 of the Central Excise Act, 1944 and surrounding circumstances such as absence of adequate power and the pattern of clearances reflected in the records. The Tribunal held that the appellants had not established a prima facie case for complete waiver and that the statutory test under section 35F required consideration both of undue hardship and protection of revenue. For appellants 4 and 5, the Tribunal found that they were only cutters and there was no allegation that they themselves were involved in the illicit sale of the HR coils or in passing on the disputed credit.

Conclusion: Complete waiver was denied for appellants 1 to 3, who were directed to make a substantial pre-deposit, with balance waiver and stay available on compliance. Pre-deposit of penalty was waived for appellants 4 and 5 and recovery was stayed.

---