Pre-deposit waiver in duty and penalty disputes turns on prima facie case, balance of convenience, and overall facts.

Waiver of pre-deposit depends on the strength of the prima facie case and balance of convenience for the duty demand, and relief may be refused where those factors favour the department; here, no interference was made with the duty demand or proposed appropriation of the bank guarantee at that stage. By contrast, the penalty could be stayed where the overall facts justified relief, and the absence of proof of financial hardship did not bar waiver. Accordingly, waiver of pre-deposit for duty was rejected, while pre-deposit of penalty was waived pending appeal.

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Issues: Whether pre-deposit of the duty demand should be waived and stay granted during the pendency of the appeal; and whether pre-deposit of the penalty should be waived.

Analysis: On the duty demand, the prima facie case and balance of convenience were found to be in favour of the department, so no interference was made with the duty demand or the proposed appropriation of the bank guarantee amount at that stage. On the penalty, the overall facts and circumstances justified consideration of relief, and the absence of material on financial hardship did not preclude waiver.

Outcome: The request for waiver of pre-deposit in respect of the duty demand was rejected, while the pre-deposit of penalty was waived during the pendency of the appeal. The order was not interfered with as to the appropriation of Rs. 65,000 and realisation of duty at this stage.

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