Pre-deposit and revenue neutrality in SAD disputes: Tribunal followed earlier 50% deposit approach and denied greater stay relief.

A stay application on pre-deposit was considered in the context of claimed revenue neutrality and exemption from Special Additional Duty under Notification No. 23/03-Cus. The Tribunal observed that a later Larger Bench ruling prima facie supported the applicant on the SAD issue, but revenue neutrality was not fully established at the stay stage because it was not shown that the bulk drugs were used in the manufacture of dutiable products in sister units. Following an earlier order in the same matter directing 50% deposit, the Tribunal required a pre-deposit of Rs. 3.10 crores and declined further relief.

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Issues: Whether the applicant was entitled to waiver of substantial pre-deposit in view of the plea of revenue neutrality and the claimed exemption from Special Additional Duty under Notification No. 23/03-Cus. dated 31.03.2003, and whether the earlier order directing 50% deposit should be followed.

Analysis: The Tribunal noted that the contention based on the later Larger Bench ruling prima facie supported the applicant on the SAD issue, but held that revenue neutrality could not be fully accepted at the stage of considering stay because it was not established that the bulk drugs were used in the manufacture of dutiable products in the sister units. Since an earlier order in the applicant's own case had directed deposit of 50% of the duty demand, the Tribunal considered it appropriate to follow that approach for the present matters.

Conclusion: The applicant was directed to make a pre-deposit of Rs. 3.10 crores within eight weeks; the request for greater relief was declined.

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