Pre-deposit waiver in alleged clandestine EOU clearances denied where precedent on legitimate DTA removal was inapplicable.

Prima facie waiver of full pre-deposit was refused where the demand arose from alleged clandestine removal from a 100% EOU to DTA, supported by shortages and the proprietor's admission, and a cited precedent on legitimate EOU clearances was held inapplicable. The tribunal also noted a separate finding of procurement of raw materials from another 100% EOU. Financial hardship from closure of the unit was considered, but only for fixing the deposit amount. A partial pre-deposit was directed, with waiver of the balance duty and entire penalty subject to compliance.

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Issues: Whether waiver of full pre-deposit of duty and penalty was justified in an appeal against demand arising from alleged clandestine clearance from a 100% EOU to DTA, and whether the cited precedent on duty liability for EOU clearances to DTA supported grant of full relief.

Analysis: The application was considered on a prima facie basis. The cited precedent was found inapplicable because it concerned legitimate clearance from a 100% EOU to DTA, whereas the present matter involved allegations of clandestine removal supported by shortages and the proprietor's admission. A further finding existed regarding procurement of raw materials from another 100% EOU. Financial hardship due to closure of the unit was also taken into account while considering the extent of pre-deposit.

Outcome: Full waiver was declined and a partial pre-deposit of Rs. 5 lakhs was directed, with waiver of the balance duty and entire penalty subject to compliance.

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