Pre-deposit waiver in excise dispute granted on arguable marketability, exemption, and Modvat credit issues pending appeal.

In a central excise dispute over propagated yeast, the Tribunal granted waiver of pre-deposit and stayed recovery pending appeal on a prima facie view of the case. The appellant's arguable objections on the marketability of the alleged excisable product, reliance on exemption under Notification No. 217/86, and additional claims regarding adjustment of duty-paid input yeast and availability of Modvat credit were considered sufficient to justify interlocutory relief. The decision reflects that where substantial and debatable issues are raised, pre-deposit may be waived and recovery kept in abeyance until the appeal is heard.

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Issues: Whether the appellant was entitled to waiver of pre-deposit and stay of recovery pending appeal in a central excise dispute concerning demand on propagated yeast.

Analysis: The application for waiver was considered on a prima facie assessment of the dispute. The appellant raised substantial objections on marketability of the alleged excisable product and also relied upon exemption under Notification No. 217/86, while additional contentions were raised regarding adjustment of the duty-paid input yeast and availability of Modvat credit. In view of these arguable issues, the Tribunal found that the case warranted relief against pre-deposit at the interlocutory stage.

Conclusion: The requirement of pre-deposit was waived and recovery of the duty and penalty was stayed.

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