Waiver of pre-deposit and acceptance of bank guarantee as adequate security in a customs appeal

An interim customs appeal issue concerned whether pre-deposit could be waived and whether an existing bank guarantee could serve as adequate security during pendency of the appeal. The exemption notification was read as covering aircraft used for both non-scheduled passenger services and non-scheduled charter services, which gave the appellant an arguable case at the interim stage. The bank guarantee furnished under an earlier High Court arrangement toward the duty component was treated as sufficient security for the differential customs duty. On that basis, further pre-deposit was dispensed with while the appeal remained pending.

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Issues: Whether waiver of pre-deposit was justified and whether the existing bank guarantee could be treated as sufficient security during pendency of the appeal.

Analysis: The exemption notification was read as covering use of aircraft for both non-scheduled passenger services and non-scheduled charter services, giving the appellants an arguable case at the interim stage. The bank guarantee had been furnished pursuant to the earlier High Court arrangement towards the duty component, and it was considered just and fair to treat that guarantee as adequate security for the differential customs duty involved. On that basis, insistence on further pre-deposit was dispensed with while the appeal remained pending.

Conclusion: Waiver of pre-deposit was granted and the bank guarantee was accepted as sufficient security, in favour of the appellant.

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