Pre-deposit waiver and stay of recovery granted for interest and penalty after full duty payment before notice, including director penalty.

Where the full duty demand had been paid before the show-cause notice, interim protection was granted against recovery of the surviving interest and penalty demands. The absence of any order by the competent officer withdrawing the facility of fortnightly duty payment was relevant, and the claimed inability to avail CENVAT credit did not justify denial of stay. Similar relief was also extended to the penalty imposed on the director, so pre-deposit was waived and recovery stayed for both the assessee and the director in relation to the remaining interest and penalty liabilities.

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Issues: Whether waiver of pre-deposit and stay of recovery could be granted in respect of interest and penalty where the entire duty had been paid before issue of show-cause notice, and whether similar relief could be extended to the penalty on the director.

Analysis: The appellant had paid the full duty demand prior to the show-cause notice. No order forfeiting the facility of fortnightly payment of duty had been issued by the competent officer, and the demand surviving was confined to interest and penalty. In these circumstances, the claimed inability to avail CENVAT credit did not justify refusal of interim protection.

Outcome: Waiver of pre-deposit and stay of recovery were granted in respect of the penalty and interest, with similar relief for the penalty imposed on the director.

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