Pre-deposit waiver in a stay petition was refused where the dispute on compounded levy and Modvat credit remained arguable.

The Tribunal held that the applicants had not shown a strong prima facie case for complete waiver of pre-deposit in a stay petition concerning the compounded levy scheme, exemption, and Modvat credit on intermediate products. As the rival contentions were arguable on both sides, complete waiver was refused. Partial deposit was directed, and recovery of the balance duty and penalty was stayed during pendency of the appeal on compliance with the specified deposit condition.

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Issues: Whether the applicants made out a strong prima facie case for complete waiver of the pre-deposit of duty and penalty in the stay petition.

Analysis: The dispute related to applicability of the compounded levy scheme and denial of exemption and Modvat credit in respect of intermediate products. The Tribunal found the rival contentions to be arguable on both sides, but not sufficient to justify complete waiver of the pre-deposit requirement. It therefore directed partial deposit and ordered stay of recovery for the balance during pendency of the appeal.

Conclusion: Complete waiver of pre-deposit was refused. The stay petition was allowed only to the extent of permitting recovery of the balance duty and penalty to remain stayed on deposit of Rs. 25,00,000 within the stipulated period.

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