Pre-deposit waiver for interest on short-levied NCCD allowed where absence of collection machinery raised a prima facie issue.

In a modification application, CESTAT New Delhi waived the pre-deposit of interest arising from a short-levied NCCD demand because a relevant legal ground had not been considered earlier. The Tribunal treated the absence of machinery provisions for collection of interest on the short levy as a prima facie factor affecting enforceability at the stay stage, particularly where the short levy arose from availing Cenvat credit. On that basis, it modified the earlier stay order and stayed recovery of the disputed interest dues.

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Issues: Whether, in a modification application, the requirement of pre-deposit of interest arising from the impugned order could be waived on the ground that the legal basis for collecting interest on short-levied NCCD had not been considered earlier.

Analysis: The Tribunal noted that the legal position regarding the absence of machinery provisions for collection of short-levied NCCD had not been brought to its notice when the stay petition was earlier argued. It held that this was a relevant legal aspect affecting the demand for interest, and that the short levy had arisen from availing Cenvat credit. In view of this prima facie legal position, the demand for pre-deposit of interest did not merit continued enforcement at the stay stage.

Conclusion: The modification application was allowed and the pre-deposit of interest arising from the impugned order was waived.

Final Conclusion: Relief was granted at the interim stage by modifying the earlier stay order and staying collection of the disputed interest dues.

Ratio Decidendi: Where a relevant legal ground showing absence of machinery for collection of a duty-related levy is not considered earlier, a prima facie case may justify waiver of pre-deposit of the consequential interest demand.

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