Pre-deposit relief in exemption dispute: partial waiver granted where hardship was not shown and the claim was not strong enough.

A dispute over eligibility for exemption under Notification No. 462/86-C.E. for chassis manufactured for light commercial motor vehicles was treated as requiring detailed examination at the regular hearing. At the interim stage, the applicants did not show financial hardship and their exemption claim was not strong enough to justify complete waiver of pre-deposit. Partial protection was granted instead: the applicants were directed to deposit a reduced amount, while the balance of the duty demand and the entire penalty were stayed pending appeal.

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Issues: Whether the applicants had made out a case for waiver of pre-deposit of the demanded duty and penalty in a dispute concerning availability of exemption under Notification No. 462/86-C.E. to chassis manufactured for light commercial motor vehicles.

Analysis: The exemption issue was found to be contentious and fit for detailed consideration at the time of regular hearing. Since the applicants did not urge financial hardship and the claim was not shown to be strong enough at the interim stage, complete waiver of pre-deposit was not justified. At the same time, the Tribunal considered it appropriate to protect the applicants against immediate recovery by granting partial relief on payment of a reduced amount, with the balance of duty and the entire penalty stayed pending appeal.

Conclusion: The application for full waiver was rejected in part and the applicants were directed to deposit Rs. 30 lakhs, with waiver of the remaining duty demand and the entire penalty on compliance.

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