CENVAT credit waiver of pre-deposit denied where transit diversion evidence and admissions defeated the stay plea.

Waiver of pre-deposit and stay of recovery were refused where the demand arose from alleged wrongful CENVAT credit on inputs claimed not to have been received in the factory. Investigation material indicated diversion of goods in transit, supported by admissions from the transporter and the actual purchasers at Viramgam, and the absence of consignee copies of transport documents. On that factual basis, the request for waiver was held unmade out and the cited precedent was treated as inapplicable because the factual setting and hardship plea differed. The appellants were directed to pre-deposit Rs. 5 lakhs within eight weeks, with the balance demand stayed only on compliance.

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Issues: Whether the appellants were entitled to waiver of pre-deposit and stay of recovery pending appeal.

Analysis: The demand arose from alleged wrongful availment of CENVAT credit on inputs said not to have been received in the factory. The record showed investigation material indicating diversion of the goods in transit, admissions by the transporter and by the actual purchasers at Viramgam, and absence of consignee copies of transport documents. In these circumstances, the case for waiver of pre-deposit was not made out, and the reliance on the cited precedent was found inapplicable because the factual setting and hardship plea were different.

Conclusion: The appellants were directed to pre-deposit Rs. 5 lakhs within eight weeks under Section 35F of the Central Excise Act, 1944, and only on compliance would the balance demand remain waived and recovery stayed during the pendency of the appeals.

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