Pre-deposit waiver in mixed factual exemption disputes may be denied, with only conditional stay relief granted pending appeal.

Conditional stay relief was considered in a dispute over duty, interest and penalty arising from alleged ineligibility under Notification No. 10/97-CE. Supplies to research and educational institutions appeared prima facie to fall within the notification, while supplies to certain other entities raised a debatable issue on applicability. Because the factual position was mixed, complete waiver of pre-deposit was not justified. Reduced pre-deposit was directed instead, and recovery of the balance demand was stayed on compliance, giving the appellant only limited interim protection pending the appeal.

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Issues: Whether complete waiver of pre-deposit could be granted in the stay application, and whether recovery of the balance demand should be stayed pending disposal of the appeal.

Analysis: The appellant had been called upon to pay duty, interest and penalty on the ground of ineligible benefit under Notification No. 10/97-CE. The supplied goods to several research and educational institutions appeared prima facie to be covered by the notification, but the supplies to certain other entities raised a debatable question on applicability. In view of the mixed factual position, complete waiver of pre-deposit was not justified, though conditional relief could be granted to protect the appellant during the pendency of the appeal.

Conclusion: Complete waiver of pre-deposit was declined, but a reduced pre-deposit was directed and the balance recovery was stayed on compliance, in favour of the appellant only to that limited extent.

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