Export obligation compliance and dropped proceedings barred Customs from insisting on pre-deposit and recovery in this dispute.

Where the Development Commissioner had dropped proceedings and accepted compliance with the export obligation, Customs authorities could not, on the settled view applied by the Tribunal, question the validity of that permission or insist on pre-deposit and recovery. On that prima facie basis, the appellant was found entitled to waiver of pre-deposit, and recovery of the duty demand was stayed.

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Issues: Whether, on the strength of the Development Commissioner having dropped proceedings and accepted compliance with the prescribed export obligation, the Customs authorities could still insist on pre-deposit and proceed to recover the duty demand.

Analysis: The record showed that the Development Commissioner had dropped the proceedings against the appellant. The Tribunal relied on the settled view that where the competent authority grants permission for DTA clearance and drops proceedings, the Central Excise or Customs authorities are precluded from questioning the validity of that permission. On that prima facie basis, and considering the substantial duty amount involved, the appellant was held entitled to waiver of pre-deposit and stay of recovery.

Conclusion: The demand was held to be covered prima facie in favour of the appellant, and pre-deposit of the duty and recovery were stayed.

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