Prima facie absence of Customs Act violation justified waiver of penalty pre-deposit and stay of recovery pending appeal.

On a prima facie assessment of the appellants' role as project financiers and the later transfer of the project on default, the Tribunal found no immediate violation of the Customs Act, 1962 that would justify penalty liability at this stage. It therefore held that the appellants were entitled to waiver of pre-deposit of the penalty imposed under Section 112(b) and granted stay of recovery pending disposal of the appeal.

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Issues: Whether the appellants were entitled to waiver of pre-deposit of the penalty imposed under Section 112(b) of the Customs Act, 1962 and stay of its recovery pending appeal.

Analysis: The application was considered on a prima facie assessment of the appellants' role as financer of the project and the subsequent transfer of the project on default. On that basis, the Tribunal found no prima facie violation of the Customs Act, 1962 that would make the appellants liable to penalty at this stage.

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

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