Prima facie waiver of pre-deposit allowed in alleged DEEC scheme misuse dispute, with stay of recovery pending appeal.

Prima facie waiver of pre-deposit and stay of recovery was granted where the duty demand rested on alleged misuse of the DEEC/Advance Licence Scheme. The tribunal noted that the quantity-based advance licence had been cancelled by DGFT, the DEEC book had not been utilised, and the bills of entry were not shown to have been filed by or under the appellant's authority. It also observed that no investigation or finding established that the CHA was authorised by the appellant, which weakened the revenue's case at the interim stage. On that basis, the appellants were entitled to interim protection pending appeal.

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Issues: Whether the appellants made out a prima facie case for waiver of pre-deposit of duty and penalties and for stay of recovery pending appeal.

Analysis: The demand arose from alleged misuse of the DEEC/Advance Licence Scheme in relation to duty-free imports and non-fulfilment of export obligations. The tribunal found prima facie force in the appellants' case that the quantity-based advance licence had been cancelled by the DGFT, that the DEEC book had not been utilised, and that the bills of entry were not shown to have been filed by or under the authority of the appellant. It was also noted that no investigation or finding established that the CHA was authorised by the appellant, despite this being a relevant factual assertion in the proceedings.

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

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