Export obligation shortfall under EPCG justified refusal of full pre-deposit waiver, though partial stay was granted on hardship grounds.

Non-fulfilment of export obligation under an EPCG licence justified refusal of complete waiver of pre-deposit in a duty-free import dispute, because the admitted shortfall weakened the case on merits. The Tribunal nevertheless balanced the applicant's pleaded financial hardship, claimed losses, availability of the imported goods, and overall financial position, and granted only partial relief. Complete waiver was declined; partial waiver was allowed on condition of pre-deposit of Rs. 5,00,000 within eight weeks, with waiver of the balance duty and penalty and stay of recovery on compliance.

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Issues: Whether the applicant was entitled to complete waiver of pre-deposit of duty and penalty and stay of recovery pending appeal, in view of partial non-fulfilment of export obligation and pleaded financial hardship.

Analysis: The demand arose from denial of the benefit of duty-free import of capital goods under Notification No. 160/92-Cus. on the ground that the export obligation under the EPCG licence had not been fully fulfilled within the stipulated period. The admitted non-fulfilment of the export obligation weighed against a full waiver on merits. At the same time, the Tribunal took into account the plea of financial hardship, the claimed losses, the availability of the imported goods, and the applicant's financial position, and balanced these factors while considering stay.

Conclusion: Complete waiver was declined, but partial waiver was granted subject to pre-deposit of Rs. 5,00,000 within eight weeks, with waiver of the balance duty and penalty and stay of recovery on compliance.

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