Omission of penalty provision and no saving clause supported waiver of pre-deposit and stay of recovery

Omission of the penalty provision and the related Section 3A from the statute book, without any saving clause, was treated as a strong prima facie ground against continued enforcement of penalty under Rule 96ZP(3). The Tribunal noted prior authority setting aside a similar penalty where the show-cause notice was issued after the omission, and in the absence of any contrary binding precedent it found a prima facie case for the appellants. Waiver of pre-deposit and stay of recovery were granted.

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Issues: Whether the demand for pre-deposit and recovery should be stayed in view of the omission of the provision under which penalty was imposed and the absence of a saving clause.

Analysis: The appellants were proceeded against for delay in payment of duty under the compounded levy scheme, and penalty was imposed under Rule 96ZP(3). It was noted that the relevant provision and Section 3A had been omitted from the statute book without any saving clause, and that the cited Tribunal decision had set aside a similar penalty where the show-cause notice was issued after such omission. In the absence of any contrary binding authority, the Bench held that the appellants had shown a prima facie case against the penalty.

Conclusion: Waiver of pre-deposit and stay of recovery were granted.

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