Pre-deposit and stay relief limited where no strong prima facie case existed, despite financial hardship considerations.

Waiver of pre-deposit in a stay application was considered in light of the appellant's lack of a strong prima facie case and its admitted ineligibility for the benefit of Notification No. 202/88-C.E. during the relevant period, because it did not have a hot rolling mill. Financial hardship was also taken into account in fixing the extent of deposit. The appellants were required to deposit Rs. 50,000 within ten weeks; on compliance, the balance duty and entire penalty were waived and recovery stayed pending disposal of the appeal. Non-compliance would expose the appeal to dismissal under Section 35F of the Central Excise Act, 1944.

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Issues: Whether waiver of pre-deposit of duty and penalty was justified and whether the appellants had made out a strong prima facie case for full dispensation in the stay application.

Analysis: The appellants were held to have no strong prima facie case, as the record showed admission that they did not have a hot rolling mill during the relevant period and had availed the benefit of Notification No. 202/88-C.E. without entitlement. At the same time, financial hardship was taken into account while considering the extent of pre-deposit required.

Outcome: The appellants were directed to deposit Rs. 50,000 within ten weeks, and on such deposit the balance duty and entire penalty stood waived and recovery stayed till disposal of the appeal; failure to comply would expose the appeal to dismissal under Section 35F of the Central Excise Act, 1944.

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