Pre-deposit waiver confined to disputed duty and interest where penalty had attained finality and remained recoverable.

Under the compounded levy scheme, the Tribunal correctly confined waiver of pre-deposit to the disputed duty and interest after duty had already been paid, while treating the reduced penalty as concluded and recoverable because that determination had attained finality and was not challenged. The later stay proceedings did not reopen the penalty issue, and no error was shown in leaving the penalty outside the pre-deposit waiver. The challenge therefore failed.

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Issues: Whether the Tribunal erred in waiving pre-deposit only in respect of the disputed duty and interest while treating the penalty as concluded and recoverable.

Analysis: The petitioner had opted for the compounded levy scheme under Rule 96ZE of the Central Excise Rules, 1944. The Tribunal had earlier remanded the matter for recomputation of duty while reducing the penalty to Rs. 10 lakhs, and that determination of penalty had attained finality as it was not challenged. In the subsequent stay proceedings, the Tribunal noted that the duty stood paid and therefore waived pre-deposit to that extent, while leaving the penalty amount, which was not in dispute in the appeal, open for recovery. No error in that approach was shown.

Conclusion: The Tribunal's order was not erroneous and the challenge failed.

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