Strict exemption compliance and valid security conditions defeat predeposit waiver when the bank guarantee is prima facie altered.

Exemption benefits depended on strict compliance with the prescribed bond and security conditions. An altered bank guarantee was treated as prima facie invalid, so the importer could not claim waiver of predeposit on that basis. Materials seeking reduction of the duty demand, produced only at the stay stage, were not acted upon, and the asserted financial hardship was unsupported by evidence. On the record, there was a prima facie breach of the exemption condition, so full waiver was refused and deposit of the duty with part of the penalty was required before limited relief on the remaining penalty amount.

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Issues: Whether waiver of predeposit and stay of recovery should be granted where the import was cleared against an altered bank guarantee and the claim of financial hardship was unsupported.

Analysis: The exemption notification required compliance with the prescribed bond and security condition, and the bank guarantee produced for clearance was found prima facie to have been altered and therefore not valid. The materials seeking reduction of the duty demand were produced for the first time and could not be acted upon at the stay stage. The claim of hardship was also not supported by evidence, while the record disclosed a prima facie violation of the condition attached to the exemption.

Conclusion: Waiver of the entire predeposit was refused. The company was directed to deposit the duty in full and part of the penalties, with waiver granted only to the balance of the penalty amounts on compliance.

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