Predeposit waiver and stay of recovery granted where incentive amounts were not shown as duty on identical facts.

At the stay stage, the Tribunal held that a prima facie case existed for complete waiver of predeposit and for stay of recovery where the record did not show that incentive amounts were collected and represented as duty under the Central Excise framework. It noted that duty was shown in the gate passes, the incentive amount was retained for repayment of loans used to set up the unit, and an earlier decision on identical facts had already favoured the assessee. Interim relief was therefore granted and recovery of the demand remained stayed pending disposal of the appeal.

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Issues: Whether the assessee was required to make predeposit of the duty demand and whether recovery of the demand should be stayed pending disposal of the appeal in view of the incentive-scheme based clearance of sugar at concessional duty.

Analysis: The demand was founded on the allegation that the assessee had collected incentive amount as duty and was therefore liable under the Central Excise Act and the erstwhile Central Excise Rules. The Tribunal found, at the stay stage, that there was prima facie no evidence that the incentive amount had been collected and represented as duty. It noted that duty was reflected in the gate passes, that the incentive amount was retained for repayment of loans for setting up the unit, and that an earlier decision on identical facts had already held the issue in favour of the assessee.

Conclusion: The assessee made out a prima facie case for complete waiver of predeposit and for stay of recovery of the duty demand pending appeal.

Final Conclusion: Interim relief was granted in the assessee's favour and the demand recovery remained stayed until disposal of the appeal.

Ratio Decidendi: Where, on identical facts, the record does not show that incentive amounts were collected as duty, the assessee may be granted waiver of predeposit and stay of recovery at the interim stage.

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