Interim relief in EOU spare import dispute granted only partly amid contested exemption limits and factual uncertainty.

The dispute concerned exemption conditions for import of capital goods and spares by a 100% EOU, especially whether the 5% limit in Annexure-V applied at import into the bonded warehouse or only on removal of spares to the quarry site. A factual controversy also remained on whether the quantity issued to the quarry exceeded the permissible limit, and the record did not clearly resolve that issue. In view of the competing versions, the material on record, and claimed financial hardship, the Tribunal granted only partial interim relief by ordering a pre-deposit and staying recovery of the balance during pendency of the appeals.

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Issues: Whether, in the appeals arising from demand confirmed against a 100% EOU for alleged excess import of spares, the appellants were entitled to waiver of pre-deposit and stay of recovery pending disposal of the appeals.

Analysis: The dispute turned on the interpretation of the exemption notifications governing import of capital goods and spares for EOUs and, in particular, whether the 5% restriction in Annexure-V operated at the stage of import into the bonded warehouse or only on removal of spares to the quarry site. The record also showed a factual controversy as to whether the quantity issued to quarry exceeded the permissible limit, and the adjudicating authority had not settled that aspect in clear terms. Considering the competing versions, the material on record, and the plea of acute financial hardship, the Tribunal found it appropriate to grant only partial interim relief.

Conclusion: Partial waiver of pre-deposit was granted. The appellants were directed to deposit Rs. 30,00,000 within the stipulated time, and on such deposit, recovery of the balance demand was stayed during pendency of the appeals.

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