Duty demand on duty-free inputs for DTA clearances was stayed after the Tribunal accepted financial hardship and BIFR protection.

Duty demand on raw materials and consumables used to manufacture prawn seed cleared into DTA was disputed on the ground that the show cause notice targeted only the finished goods, while the appellant relied on an earlier Tribunal ruling and a BIFR order restraining coercive recovery during revival proceedings. The Department maintained that the notice expressly covered duty on duty-free inputs used in production. The Tribunal noted that the notice did include the input-based demand and that the BIFR order barred coercive action. Finding no effective rebuttal from the Revenue and accepting financial hardship arising from the unit's sick-company status, the Tribunal waived pre-deposit and stayed recovery pending disposal of the appeal.

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Issues: Whether waiver of pre-deposit and stay of recovery of the duty and penalties were justified in view of the company being a sick unit before the BIFR and the protection available against coercive recovery.

Analysis: The demand related to customs duty on imported raw materials and consumables used in the manufacture of prawn seed cleared into the domestic tariff area. The record also showed that the company had been placed before the BIFR for revival and that the BIFR had directed the customs authorities not to take coercive action for non-payment of the customs duty claimed, unless prior permission was obtained from the Board. In these circumstances, and in the absence of any further order revoking or varying the BIFR protection, the request for waiver was examined on the footing of financial hardship and the sick-industrial-unit status of the appellant.

Conclusion: Waiver of pre-deposit was allowed and recovery of the amounts was stayed till disposal of the appeal.

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