Excise classification dispute: Tribunal ordered partial pre-deposit and stayed recovery pending appeal after weighing CENVAT credit calculations.

Classification of the product as ready-to-eat packaged food rather than namkeen led to central excise duty, interest and penalty under Rule 25 of the Central Excise Rules, 2002. In considering interim relief in the appeal, the Tribunal weighed rival duty calculations with and without CENVAT credit and noted its earlier order in the appellant's own matter for an earlier period. It directed a substantial but limited pre-deposit of Rs. 24 lakhs within six weeks; on compliance, the balance dues were waived and recovery stayed during the appeal.

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Issues: Whether, in the appeal against demand of central excise duty and penalty, the appellant should be required to make a partial pre-deposit and obtain waiver of the balance during pendency of the appeal.

Analysis: The demand arose from classification of the product as ready to eat packaged food rather than namkeen, with duty, interest and penalty imposed under Rule 25 of the Central Excise Rules, 2002. Considering the rival calculations on duty liability with and without CENVAT credit, and following the Tribunal's earlier order in the appellant's own matter for an earlier period, the Court found it appropriate to balance the competing claims by directing a substantial but limited deposit as a condition for interim protection.

Conclusion: The appellant was directed to deposit Rs. 24 lakhs within six weeks, and on compliance the balance amount of dues adjudged was to remain waived and recovery stayed during the pendency of the appeal.

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