Pre-deposit waiver and recovery stay granted where limitation was arguable and financial hardship was shown.

Waiver of pre-deposit and stay of recovery were granted where the duty demand raised a prima facie limitation issue and the applicants showed financial hardship. Goods had been cleared under approved classification lists without any bond being called for, and the later redetermination of classification led to a demand questioning eligibility for Notification No. 1/93-C.E., giving rise to an arguable time-bar plea. The applicants' sickness status as a declared sick industrial company was also treated as relevant hardship. On these facts, the entire duty deposit was waived and recovery stayed pending appeal.

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Issues: Whether the applicants were entitled to waiver of pre-deposit and stay of recovery of the duty demand pending appeal, having regard to the nature of clearance under approved classification lists, the prima facie plea of limitation, and financial hardship.

Analysis: The goods had been cleared under approved classification lists and no bond had been furnished or called for on the footing that the lists were provisional. The demand was raised after redetermination of classification and the subsequent notice sought recovery on the ground that the applicants were not entitled to the benefit of Notification No. 1/93-C.E. dated 28-2-1993, giving rise to a prima facie plea that part of the demand was time-barred. Financial hardship was also noted, including the fact that the company had been declared a sick industrial company under Section 3(1)(o) of the Sick Industrial Companies (Special Provisions) Act, 1985.

Conclusion: The applicants were granted waiver of the entire duty deposit and recovery of the amount was stayed during the pendency of the appeal.

Ratio Decidendi: In a pre-deposit application, waiver may be granted where the demand discloses a prima facie limitation issue and the appellant establishes financial hardship.

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