Waiver of pre-deposit on alleged customs notification breach granted where non-compliance was not prima facie established.

Prima facie waiver of pre-deposit was found justified where alleged breach of Notification No. 64/88-Cus. was not established at the interim stage. The alleged outdoor-patient condition was not shown to be violated because the show cause notice did not allege breach of that clause, and collection of registration charges from patients unable to pay was not shown to be incorrect. On the indoor-patient condition, mere absence of income records was held insufficient to show non-compliance, particularly as the notification did not require any specific record maintenance. In the absence of rebuttal material, a strong prima facie case supported waiver of pre-deposit and stay of recovery pending appeal.

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Issues: Whether the applicants had made out a prima facie case for waiver of pre-deposit of penalty and stay of recovery on the ground that the alleged breach of Notification No. 64/88-Cus. dated 01-03-1988 was not established at this stage.

Analysis: The alleged contravention of the condition relating to outdoor patients was not prima facie made out, since the show cause notice did not allege breach of that clause and the collection of registration charges from patients unable to pay was not shown to be incorrect. As to the condition relating to indoor patients, mere non-maintenance of income records was not by itself sufficient to hold non-compliance, particularly when the notification did not require maintenance of any specific record. In the absence of material rebutting the applicants' stand, a strong prima facie case was found in favour of the applicants.

Conclusion: The applicants were entitled to waiver of pre-deposit and stay of recovery pending the appeal.

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