Pre-deposit waiver in customs dispute refused where prima facie misdeclaration and restricted export violations were found.

Complete waiver of pre-deposit was refused in a customs stay application where the record indicated a prima facie case of misdeclaration and alleged unlawful export of restricted goods. The Tribunal noted that the exported goods appeared to be Muriate of Potash rather than industrial salt, that the source of procurement had not been disclosed, and that the exports were said to have breached export restrictions and licensing requirements under the applicable DGFT notification. Balancing interim equities and revenue protection, the Tribunal directed a partial pre-deposit and granted stay of recovery for the balance demand pending disposal of the appeal.

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Issues: Whether the appellant was entitled to complete waiver of pre-deposit and stay of recovery pending appeal in a customs matter involving alleged misdeclaration and illegal export of restricted goods.

Analysis: The adjudication record showed a prima facie case that the exported goods were Muriate of Potash and not industrial salt, that the appellant had not disclosed the source of procurement, and that the exports were allegedly made in violation of the export restriction and the licensing requirement under the applicable DGFT notification. On that basis, the Tribunal held that the revenue had made out a strong case of misdeclaration and fraud, and that the appellant had not established sufficient grounds for total waiver. At the same time, the Tribunal balanced the interim equities in the stay application and considered the extent of pre-deposit appropriate for securing the revenue pending final disposal of the appeal.

Conclusion: Complete waiver was refused. The appellant was directed to pre-deposit Rs. 40,00,000 and, on compliance, recovery of the balance demand was stayed during pendency of the appeal.

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