Prima facie case for EOU duty waiver failed where deemed exports did not support full exemption and partial pre-deposit was ordered.

In a dispute over DTA clearances by a 100% EOU treated as deemed exports, the Tribunal held that the appellant had not established a strong prima facie case for full waiver of duty and penalty. It noted the earlier view that exemption under the relevant EOU notifications was unavailable where there were no physical exports, and that the Supreme Court's setting aside of another Tribunal decision did not undo the separate reasoning relied on against the appellant. The alternative plea for complete exemption was also rejected because the clearances remained EOU clearances and sales beyond the prescribed limits attracted full duty. Conditional interim relief was granted through partial pre-deposit and stay of the balance recovery.

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Issues: Whether the appellant had made out a prima facie case for waiver of the balance duty and penalty and stay of recovery in a dispute concerning DTA clearances by a 100% EOU on the basis of deemed exports and FOB value.

Analysis: The Tribunal noted the earlier view that exemption under the relevant EOU notifications was not available where there were no physical exports and only deemed exports. It also noted that the Supreme Court setting aside another Tribunal decision did not dislodge the separate reasoning in the decision relied upon against the appellant. The plea for complete exemption under the alternative notification was found untenable because the clearances remained EOU clearances and sales beyond the prescribed limits were liable to full duty. On that basis, the appellant was held not to have established a strong prima facie case.

Conclusion: The appellant was not entitled to complete waiver of the demanded duty and penalty at this stage.

Final Conclusion: Conditional relief was granted by directing a partial pre-deposit and staying recovery of the balance during the pendency of the proceedings.

Ratio Decidendi: In matters of interim relief, where the assessee fails to establish a strong prima facie case, the Tribunal may grant only partial waiver and protect revenue by requiring a pre-deposit with stay of the balance recovery.

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