Pre-deposit waiver for interest and penalty granted where machinery import dispute under customs exemption notification showed a prima facie case.

Import of machinery under Notification No. 21/2002-Cus. dated 01.03.2002 raised a dispute over alleged breach of notification conditions and the resulting liability to interest and penalty. The importer had already paid the duty during investigation, and the remaining controversy concerned the continuance of the interest and penalty demand pending appeal. On a prima facie view, the request for waiver was found sustainable, and pre-deposit of interest and penalty was waived. Recovery of those amounts was stayed during pendency of the appeal.

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Issues: Whether pre-deposit of interest and penalty should be waived and recovery stayed pending disposal of the appeal.

Analysis: The dispute arose from import of machinery claimed under Notification No. 21/2002-Cus. dated 01.03.2002. The applicant had already paid the duty during investigation, and the remaining controversy concerned alleged violation of the notification conditions and the sustainability of interest and penalty. On a prima facie assessment, the claim for waiver was found to have merit.

Outcome: Pre-deposit of interest and penalty was waived, and recovery thereof was stayed during pendency of the appeal.

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