Pre-deposit waiver for penalty granted where reversed credit was undisputed and notification interpretation was in issue.

Complete waiver of pre-deposit of penalty and stay of recovery were granted pending appeal where the credit had already been reversed before adjudication and that fact was undisputed. The dispute also involved interpretation of Notification No. 5/94-C.E.(N.T.) dated 01-03-1994, and on that basis penalty was not considered warranted at the stage of deciding waiver of pre-deposit. The operative effect was relief from pre-deposit and recovery pending disposal of the appeal.

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Issues: Whether the appellant was entitled to complete waiver of pre-deposit of the penalty amount and stay of recovery pending appeal, where the dispute turned on interpretation of Notification No. 5/94-C.E.(N.T.) dated 01-03-1994.

Analysis: The credit in question had been reversed before the adjudication order, and this factual position was not disputed. The matter also involved interpretation of the notification, and in such a dispute the imposition of penalty was not considered warranted at the stage of considering waiver of pre-deposit.

Conclusion: Complete waiver of pre-deposit of the penalty amount and stay of recovery were granted pending the appeal.

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