Interim pre-deposit waiver turns on a prima facie case; partial stay granted where some duty demands lacked immediate recovery basis.

Interim waiver of pre-deposit depends on a prima facie case, and full stay is not warranted where concrete material supports part of the duty demand. The tribunal found that allegations relating to diversion of duty-free inputs to another concern were backed by register entries and corroborative statements, so no complete waiver was justified on that component. At the same time, demands linked to transfer of duty-free inputs and scrap to a 100% EOU unit, which could procure inputs against CT-3 certificates, did not require full pre-deposit at the interim stage. Partial relief was therefore granted, with conditional deposit and stay of recovery pending final appeal.

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Issues: Whether the appellants were entitled to waiver of pre-deposit and stay of recovery in respect of the confirmed duty demand, interest, and penalties arising from alleged diversion of duty-free inputs and unauthorized transfer of materials.

Analysis: The demands relating to transfer of duty-free inputs and scrap materials to the Noida unit were treated as not warranting full pre-deposit at the interim stage, since the Noida unit was a 100% EOU entitled to procure duty-free inputs against CT-3 certificates. However, the demand relating to alleged diversion of duty-free inputs to Allure International was found to rest on concrete material, including register entries and corroborative statements, and the appellants failed to establish a prima facie case for waiver on that count.

Conclusion: Partial relief was granted. The Bhiwadi unit was directed to deposit Rs. 60,00,000 within the stipulated time, and on such deposit the balance pre-deposit requirement for the duty, interest, and penalty stood waived with recovery stayed till disposal of the appeals.

Final Conclusion: The order granted only conditional interim relief and left the merits of the duty demand and penalties open for final adjudication in the appeals.

Ratio Decidendi: For interim waiver of pre-deposit, the appellants must establish a prima facie case; where concrete evidence supports a substantial demand, full waiver is not justified, though partial protection may be granted where some demands are not shown to warrant immediate recovery.

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