Pre-deposit waiver in central excise penalty dispute granted where evidence was not prima facie sufficient at interim stage.

A transport company sought waiver of deposit and stay of recovery of a penalty imposed under Rule 209A of the Central Excise Rules, 1944. The interim question was whether the material relied on was sufficient to justify insisting on pre-deposit. The company argued that it could not verify the authenticity of every delivery challan or gate pass and that its records indicated bona fides. The alleged use of delivery challans bearing the same number was found, on the material then available, not prima facie enough to sustain the penalty at the interim stage. Waiver of deposit was granted and recovery of the penalty was stayed.

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Issues: Whether the applicant was entitled to waiver of deposit of the penalty imposed under Rule 209A of the Central Excise Rules, 1944 and stay of recovery pending disposal of the matter.

Analysis: The applicant, a transport company, contended that it could not reasonably be expected to verify the authenticity of every delivery challan or gate pass in each transaction, and that its records showed bona fides. The allegations rested mainly on a statement indicating that multiple delivery challans bore the same number, but that statement was not found to be prima facie sufficient to justify the penalty. The case against the transport company was considered unclear, and the material relied upon did not establish enough at the interim stage to require deposit of the penalty.

Conclusion: Waiver of deposit was granted and recovery of the penalty was stayed.

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