Customs notification breach and DEPB drawback dispute led to refusal of full pre-deposit waiver in a stay application.

In a waiver-of-predeposit dispute under Customs Notification No. 32/97-Cus., the tribunal considered whether availing DEPB credit and duty drawback on exports made from duty-free imported raw materials for job work amounted to a breach of the notification. Board circulars on wrong availment of DEPB benefit and duty drawback in similar situations were treated as prima facie clarificatory, while the jurisdictional challenge under the 1996 concessional import rules was not examined at the stay stage. The tribunal found the issue contentious and noted the absence of financial hardship, so complete waiver was refused and a pre-deposit was directed.

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Issues: Whether the appellants had made out a prima facie case for waiver of pre-deposit and stay of recovery in a dispute concerning alleged breach of Customs Notification No. 32/97-Cus. by availing DEPB credit and duty drawback on exports made under the notification.

Analysis: The appellants imported raw materials duty-free under Notification No. 32/97-Cus. for jobbing, with export of the final product to the overseas supplier. The Department alleged that availing DEPB credit and duty drawback on exports from such goods amounted to breach of the notification. The order noted the Board's circulars dealing with wrong availment of DEPB benefit and duty drawback in similar circumstances and treated them as prima facie clarificatory in nature. The jurisdictional challenge based on the Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 1996 was not examined at the stage of considering waiver. The order also found that the case raised a contentious issue and that the appellants had not shown financial hardship.

Conclusion: The appellants did not establish a strong prima facie case for complete waiver of pre-deposit and stay. A pre-deposit of Rs. 5,00,000 was directed.

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