Pre-deposit waiver for customs and excise penalties was granted where the dispute involved only paper entries and no physical goods dealing.

CESTAT Ahmedabad held that, for appeals against penalties imposed under the Customs Act, 1962 and the Central Excise Rules, 2002, the appellants had shown a prima facie case for waiver of pre-deposit where the Revenue's own case was that only paper entries were made and no physical receipt or dealing in goods occurred. On that basis, the Larger Bench ruling cited by the appellants was found applicable at the interim stage. The condition of pre-deposit of penalties was therefore dispensed with, and recovery of the penalties was stayed pending disposal of the appeals.

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Issues: Whether the appellants were required to make pre-deposit of penalties imposed under the Customs Act, 1962 and the Central Excise Rules, 2002, and whether recovery of the penalties should be stayed during pendency of the appeals.

Analysis: The appellants were penalised on the allegation that they had made only paper entries without any physical receipt or dealing with the goods. The order noted the Revenue's own case that the goods were never physically dealt with by the appellants and only paper entries were made. On that basis, the Larger Bench decision relied upon by the appellants was found to apply prima facie, warranting consideration of waiver of pre-deposit.

Conclusion: The condition of pre-deposit of the penalties was dispensed with and recovery of the penalties was stayed during the pendency of the appeals, in favour of the appellants.

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