Customs exemption for aircraft import: prima facie breach of permit conditions led to partial stay, not full waiver.

Import of an aircraft under customs exemption Notification No. 21/2002-Cus. was examined for stay relief on the basis of prima facie compliance with the exemption conditions and the applicant's financial hardship. The permit relied on was for non-scheduled air transport services (passenger), while the charter permit was distinct, and the undertaking to Customs also required passenger use. On that footing, the exemption conditions and undertaking were treated as prima facie violated, so full waiver of pre-deposit was declined. Balancing hardship against the case made out, partial stay was granted and deposit of half the duty demanded was directed, with the remaining duty, redemption fine, interest and penalties stayed pending appeal.

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Issues: Whether the applicant was entitled to full waiver of pre-deposit and stay of recovery in respect of duty, redemption fine, interest and penalties arising from the alleged violation of the customs exemption notification governing import of the aircraft.

Analysis: The aircraft had been imported availing customs exemption under Notification No. 21/2002-Cus. dated 01.03.2002, as amended by later notifications. The operative question for stay was whether the applicant had made out a prima facie case that the aircraft was covered by the permit and the exemption conditions, and whether financial hardship justified dispensing with pre-deposit. The Court noted that the DGCA permit was for non-scheduled air transport services (passenger), that the permit for charter services was distinct, and that the undertaking to Customs also required use for passenger services. On that basis, it held prima facie that the notification conditions and the undertaking stood violated, and therefore full waiver was not justified. At the same time, the pleaded financial hardship was taken into account while balancing the stay relief.

Conclusion: Full waiver of pre-deposit was declined. The applicant was directed to deposit 50% of the duty demanded, and the balance duty, redemption fine, interest and penalties were stayed pending disposal of the appeal.

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