Prima facie case and financial hardship justified unconditional stay against pre-deposit of central excise duty and penalty.

Unconditional stay and dispensation of pre-deposit may be granted where the applicant shows a strong prima facie case and financial hardship. On the contract with Northern Coalfields Ltd. and prior orders-in-original, the applicants contended they were not the manufacturer of the dragline and therefore had a substantial defence against the confirmed central excise duty and penalty. Their weak financial position, including accumulated losses and reference to BIFR, supported relief. On reviewing the materials, the Tribunal accepted both the prima facie case and the precarious financial condition, and granted unconditional stay of the pre-deposit requirement.

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Issues: Whether the applicants were entitled to unconditional stay and dispensation of pre-deposit of the confirmed central excise duty and penalty.

Analysis: The applicants relied on the contract with Northern Coalfields Ltd. and the earlier orders-in-original to contend that they were not the manufacturer of the dragline and therefore had a strong prima facie case against the duty demand and penalty. Their precarious financial condition was also taken into account, including the large accumulated losses and reference to BIFR. On a review of the contract and the orders-in-original, the Tribunal found that the applicants had established a prima facie case and that their financial position was weak.

Conclusion: Unconditional stay of the pre-deposit requirement was granted.

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