Pre-deposit waiver in duty dispute denied where fatty acid appeared marketable and exemption claim failed prima facie.

In a stay application concerning duty on fatty acid arising during manufacture of vanaspati oil and ghee, the Tribunal held that a prima facie case for total waiver of pre-deposit was not established. It noted that an administrative communication could not override a quasi-judicial order, that fatty acid appeared excluded from the relevant chapter note, and that the product was prima facie a marketable by-product rather than mere waste. On that basis, full waiver at the stay stage was refused and only partial waiver of the demand was granted.

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Issues: Whether the appellant made out a prima facie case for total waiver of pre-deposit in the stay application.

Analysis: The demand arose from denial of exemption and duty liability on fatty acid generated in the manufacture of vanaspati oil/ghee. The appellant relied on exemption notifications and contended that the product was a waste. The Tribunal found, prima facie, that the administrative communication could not override the quasi-judicial order, that fatty acid stood excluded from the relevant chapter note, and that the product appeared to be a by-product having marketability. On that basis, the Tribunal held that a case for full waiver was not made out at the stay stage.

Conclusion: The appellant was not entitled to total waiver of pre-deposit; it was directed to deposit Rs. 10,00,000 and the balance demand was waived.

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