Pre-deposit waiver in customs penalty matters refused where allegations and financial circumstances justified only partial relief.

Full waiver of pre-deposit of penalty under the Customs Act was refused where the Tribunal, on the stay application, considered allegations of fraudulent over-valuation, misuse of export benefits, the company's financial position, and the surrounding circumstances, but made no final finding on merits. The appellants were directed to deposit Rs. 25,00,000 within the stipulated time; on such deposit, waiver of the balance pre-deposit and stay of recovery were granted pending disposal of the appeal.

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Issues: Whether the appellants were entitled to full waiver of the pre-deposit of the penalty imposed under the Customs Act, 1962.

Analysis: The Tribunal noted the serious allegations of fraudulent over-valuation and misuse of export benefits, but confined itself to the stay application and refrained from any final finding on merits. Taking into account the materials referred to in the order, the financial position reflected in the company accounts, and the overall circumstances, the Tribunal found that no case was made out for complete waiver of the pre-deposit amount.

Conclusion: Full waiver was declined, but the appellants were directed to deposit Rs. 25,00,000 towards the penalty and, upon such deposit within the stipulated time, waiver of the balance pre-deposit and stay of recovery were granted pending disposal of the appeal.

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