EPCG exemption dispute and debatable export obligation issues justified waiver of pre-deposit and stay of recovery.

An import dispute under an EPCG-linked exemption notification concerned waiver of pre-deposit and stay of recovery pending appeal. The Tribunal noted that the appellants had already deposited the differential duty during investigation and that the issues raised were debatable, including the effect of issuance of EODC, the plea of limitation, and the correct reading of the export obligation condition tied to use of the capital goods. In view of conflicting judicial views and the facts placed before it, the Tribunal found sufficient grounds for interim relief and granted waiver of the balance pre-deposit with stay of recovery during the appeal.

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Issues: Whether the appellants had made out a prima facie case for waiver of pre-deposit of the balance duty, interest, fine and penalties, and for stay of recovery pending appeal.

Analysis: The dispute arose from import of a vehicle under an EPCG-linked exemption notification. The appellants had already deposited the differential duty during investigation, and the Tribunal noted that the competing submissions raised debatable questions on the effect of issuance of EODC, the alleged time bar, and the correct interpretation of the exemption condition relating to earning foreign exchange through use of the capital goods. In view of the conflicting judicial views cited and the fact situation before it, the Tribunal held that the matter required final hearing and that the appellants had shown sufficient grounds for interim relief.

Conclusion: The appellants were held entitled to waiver of pre-deposit of the balance dues and to stay of recovery during the pendency of the appeal.

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