Conditional stay of recovery may be granted on reduced pre-deposit where substantive liability remains open in appeal.

At the stay stage, the Tribunal may grant interim protection against recovery by directing a reduced pre-deposit where the merits of the substantive liability remain open in the main appeal. Here, the appellant's liability under the advance licence scheme and its responsibility vis-a -vis the supporting manufacturer were left for later determination, so full insistence on the disputed demand was considered unnecessary. Conditional stay of recovery was therefore granted on deposit of a reduced amount within the stipulated time, with dismissal of the appeal liable to follow on default.

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Issues: Whether the appellant was entitled to stay of recovery pending appeal on a reduced pre-deposit.

Analysis: The appellant was the licence holder under the advance licence scheme and the dispute regarding ultimate liability for the goods and the extent of responsibility vis-a-vis the supporting manufacturer was left for consideration in the main appeal. At the stay stage, the Tribunal took into account the totality of facts and circumstances and considered that insistence on the full disputed amount was not necessary. It therefore directed a partial deposit as a condition for grant of interim protection.

Conclusion: The appellant was granted stay of recovery subject to deposit of Rs. 9 lakhs within eight weeks, failing which the appeal would be liable to be dismissed.

Final Conclusion: Interim recovery was suspended conditionally on a reduced pre-deposit, while the substantive liability issue was left open for decision in the main appeal.

Ratio Decidendi: At the stay stage, where the merits remain open, the Tribunal may grant conditional protection by directing a reduced pre-deposit based on the totality of circumstances.

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