Deemed exports treatment supported waiver of deposit and stay of customs, excise duty and penalty demand.

Domestic sales by a 100% export oriented unit were treated as capable of being matched against deemed exports, not only physical exports, and that premise supplied a prima facie basis for relief. The Tribunal noted that the application to the Development Commissioner treated the domestic tariff area sales as identical to cumulative exports, and that the permission granted by the Development Commissioner, with the department bound by its terms, supported the applicant's case. On that basis, waiver of deposit and stay of recovery of the customs duty, excise duty and penalty demanded were granted.

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Issues: Whether, on the facts stated, the applicant was entitled to waiver of deposit and stay of recovery of the customs duty, excise duty and penalty demanded in respect of sales made in the domestic tariff area against deemed exports.

Analysis: The demand had been founded on the view that domestic sales in a 100% export oriented unit could be matched only against physical exports, and not against deemed exports. The materials placed before the Tribunal showed that the application to the Development Commissioner disclosed that the total value of goods sold in the domestic tariff area was treated as identical to cumulative exports. At the interim stage, the Tribunal found that the permission granted by the Development Commissioner and the decision recognising that the department is bound by the terms of such permission furnished a prima facie basis in the applicant's favour.

Conclusion: The applicant was entitled to waiver of deposit and stay of recovery.

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