Stay-stage pre-deposit: Tribunal declined full waiver amid factual allegations and ordered only partial deposit with stay.

At the stay stage, the Tribunal held that allegations of fictitious manufacture, claimed exemption under Notification No. 56/2002-C.E., and the risk of double recovery against both the manufacturer and buyers raised factual issues needing full examination at final hearing. It treated the denial of cross-examination as not decisive for complete waiver at this interim stage because the relied-upon statements were of the manufacturer's employees and could be addressed in the reply to the show-cause notice. Full waiver of pre-deposit was declined, and only a partial pre-deposit was directed with waiver of the balance and consequential stay, subject to compliance by the principal appellant.

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Issues: Whether, at the stay stage, the applicants were entitled to full waiver of pre-deposit and stay of recovery in view of the Revenue's allegations of fictitious manufacture, the claimed exemption under Notification No. 56/2002-C.E., and the possibility of double recovery from the manufacturer and buyers.

Analysis: The Tribunal found that the Revenue had raised multiple factual grounds requiring detailed examination at final hearing and that the applicants' objection regarding denial of cross-examination was not a serious ground at the pre-deposit stage because the statements relied upon were of the employees of the manufacturer itself and could be tested through the reply to the show-cause notice. It also noted that the recovery of the same amount from both the manufacturer and the buyers could result in double recovery, and that the case was not one where the Revenue's version could be rejected outright at the interim stage. At the same time, the Tribunal considered that the issue required only a partial pre-deposit rather than complete waiver.

Conclusion: Full waiver was declined. The applicants were directed to pre-deposit 15% of the duty demand in the case of the first five applicants, with waiver of the balance and consequential stay, and corresponding waiver/stay was granted in the connected appeals subject to compliance by the principal appellant.

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