Predeposit waiver in customs exemption dispute declined where apparent notification breach and bond execution weighed against full stay

A stay application in proceedings alleging breach of Notification No. 32/97-Cus. was considered on the basis of claimed exemption compliance, the character of foreign exchange remittance as a security deposit, and limitation. The Tribunal found an apparent violation of the notification and noted execution of a bond, so a complete waiver of predeposit was not justified at the stay stage. The limitation plea and the contention on the nature of the remittance were left open for decision at the appeal hearing. Partial relief was granted by directing a deposit of the specified predeposit amount, after which the balance duty, interest and penalty were stayed pending appeal.

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Issues: Whether the applicant had made out a prima facie case for complete waiver of predeposit and stay of recovery in proceedings involving alleged violation of Notification No. 32/97-Cus. dated 01.04.1997.

Analysis: The application was examined on the basis of the alleged non-compliance with the exemption notification, the plea that the foreign exchange remittance was only a security deposit, and the objection that the demand was time-barred. The Tribunal found an apparent violation of the notification and noted that the applicant had executed a bond. The submissions on the character of the remittance and on limitation were not accepted at the stage of stay and were left for consideration at the appeal hearing. On that footing, complete waiver was not justified.

Conclusion: Complete waiver of predeposit was declined. The applicant was directed to deposit Rs. 75,00,000 within the stipulated time, and on such deposit the balance duty, interest and penalty were waived and recovery stayed pending appeal.

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