Prima facie fraudulent Cenvat credit justified partial pre-deposit and stay, not complete waiver, in penalty dispute.

In a pre-deposit and stay dispute over alleged fraudulent availment of Cenvat credit, the Tribunal found the department's case prima facie strong because the appellant had claimed credit without producing invoices or supporting records, and inspection and third-party inquiries did not corroborate the asserted manufacturing activity or movement of goods. The claimed payment through debit of Cenvat credit was not accepted because the credit itself was under serious doubt. Complete waiver of pre-deposit was declined, and the appellant was required to deposit part of the penalty before balance recovery was stayed.

---

---

Issues: Whether the appellant was entitled to complete waiver of pre-deposit and stay of recovery in a case involving alleged fraudulent availment of Cenvat credit and imposition of penalty.

Analysis: The appellant had availed substantial Cenvat credit over several months without producing supporting invoices or records despite repeated requisitions and summons. The factory inspection and third-party inquiries indicated that the claimed manufacturing activity and movement of goods were not supported by the material on record, and the credit was prima facie availed without receipt of goods. The claimed payment through debit of Cenvat credit was not accepted, as the underlying credit itself was under serious doubt and the earlier Tribunal order referred only to cancellation of registration. On the available record, the departmental case was found to be strong enough to justify a condition of deposit.

Conclusion: Complete waiver was declined. The appellant was directed to deposit Rs. 2,00,00,000 towards penalty, and the balance pre-deposit was waived with recovery stayed on compliance.

---