Clandestine manufacture allegations led to denial of full waiver, but conditional stay was granted after further pre-deposit.

In a stay application involving alleged clandestine manufacture and clearance of excisable goods, the record was found to contain private diaries, invoices and statements indicating non-accountal of raw materials, unrecorded production and duty-free removals. On that prima facie basis, complete waiver of duty and penalty was declined because the applicants had not shown a case for full relief. The amount already deposited during investigation was nevertheless considered, and conditional protection was granted by directing further pre-deposit within the stipulated time, with recovery of the balance stayed until disposal of the appeals.

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Issues: Whether the applicants were entitled to waiver of the balance pre-deposit and stay of recovery in view of the alleged clandestine manufacture and clearance of excisable goods.

Analysis: The record contained incriminating private diaries, invoices and statements showing non-accountal of raw materials, unrecorded production and clearance of goods without payment of duty. On that prima facie view, the applicants did not make out a case for complete waiver of duty and penalty. However, the amount already deposited during investigation was taken into account and partial relief was granted by directing an additional pre-deposit within the stipulated time, with recovery of the balance stayed till disposal of the appeals.

Conclusion: The request for full waiver was rejected, but conditional stay was granted subject to further pre-deposit, which is partly in favour of the assessee.

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