Partial pre-deposit waiver granted where the appeal was arguable and financial hardship justified reducing the deposit amount.

Interim waiver of pre-deposit may be granted partly where the appeal raises an arguable case and the applicant shows financial hardship. The order accepted that the dispute on merits was debatable, including the assessee's contention that duty and Modvat credit had not been properly deducted from the demand, and it also considered the company's financial condition. Complete waiver was declined, but the deposit amount was substantially reduced; the assessee was directed to deposit Rs. 1 lakh within eight weeks, and the balance duty and penalty were waived with recovery stayed during the appeal.

---

---

Issues: Whether waiver of pre-deposit and stay of recovery should be granted pending appeal, and to what extent, having regard to prima facie merits, financial hardship, and the assessee's claim for deduction of duty and Modvat credit.

Analysis: The dispute on merits was considered arguable on both sides. The order noted the contention that the demand had been confirmed without allowing deduction of duty and Modvat credit, and also took into account the financial condition of the applicant-company. On that basis, complete waiver was not granted, but the amount directed to be deposited was substantially reduced.

Conclusion: The assessee was directed to deposit Rs. 1 lakh within eight weeks, and on such deposit the remaining duty and penalty were waived and recovery stayed during the pendency of the appeal.

Ratio Decidendi: Interim waiver of pre-deposit may be granted partly where the appeal raises an arguable issue and the financial position of the applicant justifies reduction of the amount demanded.

---