Pre-deposit waiver and transferred import licences: original licensee was not prima facie treated as importer, with only partial deposit ordered.

Full waiver of pre-deposit was declined because the applicants showed no financial hardship, while the Tribunal treated it as prima facie difficult to regard the original exporter as the importer merely because licences issued to it were later transferred and used by another person for duty-free clearance. Rule 6 of the Foreign Trade Development Rules, 1993 was read, in the case of transferred licences, as referring to the transferee rather than the original licensee. The Tribunal also noted that the licences had been cancelled as fraudulently obtained and, on analogous facts, directed only partial deposit with stay of recovery for the balance.

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Issues: Whether the applicants were entitled to full waiver of pre-deposit and stay of recovery pending appeal, and whether the exporter could, prima facie, be treated as the importer merely because the import licences originally issued to it had been transferred and used by another person.

Analysis: The applicants did not produce evidence of financial hardship, but the Tribunal found it prima facie difficult to treat the original exporter as the importer only because licences issued to it were later transferred and used by another person for duty-free clearance. Rule 6 of the Foreign Trade Development Rules, 1993 was read as referring, in the case of transferred licences, to the transferee and not the original licensee. The Tribunal also noted that the licences had been cancelled as having been obtained by fraud and that a similar prima facie view had been taken in an earlier stay matter on analogous facts.

Conclusion: Full waiver was not granted. The applicants were directed to make specified partial deposits towards duty and penalty, and recovery of the balance was stayed upon compliance.

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