Prima facie classification dispute and absence of suppression justified conditional pre-deposit and stay of recovery.

Competing excise classification disputes were considered only at a prima facie stage for stay. Departmental approval of classification lists, finalisation of RT-12 returns, and the applicants' approach to the Board were treated as relevant to the plea that suppression of facts was not established at this stage. The applicants also demonstrated substantial financial burden. On that material, the Tribunal granted only conditional pre-deposit relief: on deposit of Rs. 3.5 crores, the balance duty demand and the entire penalty demand were waived and recovery stayed pending appeal.

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Issues: Whether the applicants were entitled to waiver of the balance pre-deposit and stay of recovery in respect of the duty and penalties demanded.

Analysis: The competing classification issues were examined only at a prima facie stage for the purpose of stay. The departmental approval of classification lists, finalisation of RT-12 returns, and the applicants' approach to the Board were treated as relevant to the plea that suppression of facts was not established at this stage. The applicants also showed a substantial financial burden, while the demand included duty and penalties under the cited excise provisions. On this material, the Tribunal found it to grant only conditional relief under the pre-deposit provision.

Conclusion: The applicants were directed to pre-deposit Rs. 3.5 crores, and on such deposit the balance duty amount and the whole of the penalty amount stood waived and recovery stayed pending the appeal.

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