Stay of recovery pending appeal requires prompt decision on waiver or pre-deposit application before coercive recovery can continue.

Where an appeal is filed with a pending application for stay of recovery or waiver of pre-deposit, the appellate authority should decide that application promptly. Recovery proceedings should not continue while the stay or waiver request remains undecided, because doing so would undermine the pending appeal and cause avoidable prejudice to the appellant. The text states that recovery was ordered to remain stayed until the appellate authority decided the application for waiver of pre-deposit and/or stay of recovery, and the petition was disposed of in favour of the assessee.

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Issues: Whether recovery of duty could be pursued while the appeal was pending and the application for stay or waiver of pre-deposit had not been decided.

Analysis: Where an appeal is accompanied by an application for stay of recovery or waiver of the pre-deposit condition, the appellate authority is expected to dispose of such application promptly. The department cannot continue recovery proceedings while the stay or waiver request remains undecided, as such inaction would defeat the purpose of the pending appeal and cause avoidable prejudice to the appellant.

Conclusion: Recovery was directed to remain stayed until the appellate authority decided the application for waiver of pre-deposit and or stay of recovery. The petition was thus disposed of in favour of the assessee.

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