Pre-deposit in stay matters may be reduced where prima facie merits and financial hardship justify partial waiver and remand.

In stay proceedings, the extent of pre-deposit may be moderated by balancing prima facie merits against financial hardship. Admissions and statements indicated receipt of raw materials and processing into motor vehicle components and spares, while the record also showed a small turnover, an earlier deposit, and an unexamined valuation plea. Complete waiver was therefore not justified, but insisting on the full demand would cause undue hardship. A substantial partial deposit was ordered to secure the appeal, and the matter was remanded to the Commissioner (Appeals) for disposal on merits after compliance.

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Issues: Whether the appellants had made out a prima facie case and financial hardship warranting partial waiver of the pre-deposit, and whether the matter should be remanded to the Commissioner (Appeals) for decision on merits.

Analysis: The record showed admissions and statements indicating receipt of raw materials and processing resulting in motor vehicle components and spares, and the lower adjudicating authority had examined manufacture and limitation. At the same time, the appellate record disclosed a small turnover, a prior deposit, and a plea regarding valuation that had not been examined in detail. In these circumstances, complete waiver was not justified, but insisting on the entire demand would cause undue hardship. The proper course was to secure the appeal by a substantial partial deposit and then remit the matter for merits consideration after proof of compliance.

Conclusion: The appellants were directed to pre-deposit Rs. 5,00,000, the balance demand and penalties were waived and stayed on compliance, and the matter was remanded to the Commissioner (Appeals) for disposal on merits.

Ratio Decidendi: In stay matters, the extent of pre-deposit may be moderated by balancing the prima facie merits of the case against financial hardship, and where the merits have not been finally adjudicated, the appeal may be remanded after ordering a partial deposit.

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