Interest on EPCG imports for unmet export obligation lacked statutory support, justifying interim stay and waiver of pre-deposit.

Under the EPCG Scheme, the demand for interest on imported capital goods cleared against export obligation was held to raise a strong prima facie issue because the cited decisions found no provision in the scheme, the notification, or the Customs Act authorising such interest for alleged non-fulfilment of export obligation. On that basis, the appellants secured waiver of pre-deposit and stay of recovery of the interest amount pending appeal, with the matter directed for out-of-turn hearing.

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Issues: Whether the appellants had made out a prima facie case for waiver of pre-deposit and stay of recovery of the interest demanded on imported capital goods cleared under the EPCG Scheme for alleged non-fulfilment of export obligation.

Analysis: The cited decisions had held that, under the EPCG Scheme and the relevant notification, there was no provision either in the scheme, in the notification, or in the Customs Act to levy interest on failure to fulfil the export obligation. On that basis, the Tribunal found that the appellant's challenge to the demand of interest raised a strong prima facie case for interim relief.

Conclusion: The appellants were entitled to waiver of pre-deposit and stay of recovery of the interest amount till disposal of the appeal, and the matter was directed to be taken up for out-of-turn hearing.

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