Pre-deposit waiver and stay relief were limited where duty was collected from customers but not fully remitted to the exchequer

Complete waiver of pre-deposit was declined where the assessee had, on a prima facie view, collected duty from customers at a higher rate while remitting duty at a lower rate to the exchequer. The Tribunal held that such conduct did not justify full stay of recovery of the adjudged interest and penalty. It nevertheless granted limited interim protection by requiring pre-deposit of the interest component calculated at the applicable rate from the commencement of Section 11DD until discharge of the duty liability, and ordered that the balance dues remain stayed on compliance.

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Issues: Whether the appellant was entitled to complete waiver of pre-deposit and stay of recovery of the adjudged interest and penalty pending appeal.

Analysis: The assessment related to the period 1982 to 1985, but the Tribunal noted that the appellant had collected duty from customers at the higher rate while paying duty at a lower rate to the exchequer. On that prima facie view, the Tribunal held that the appellant could not seek complete waiver of the dues adjudged against it. However, it also restricted the pre-deposit to the interest liability calculated at the applicable rate from the date Section 11DD came into force until the date of discharge of the duty liability, and directed that on such compliance the balance dues would stand waived and recovery stayed during the pendency of the appeal.

Conclusion: Complete waiver was declined, but partial relief was granted by directing pre-deposit of the interest component alone and staying recovery of the remaining adjudged dues.

Final Conclusion: The interim relief application was allowed only to a limited extent, with conditional protection against recovery of the balance dues upon compliance with the ordered pre-deposit.

Ratio Decidendi: Where an assessee has prima facie collected duty from customers without remitting the corresponding amount to the exchequer, complete waiver of adjudged dues is not justified, though conditional stay may be granted against the balance on limited pre-deposit.

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