Pre-deposit relief on prima facie compliance with import conditions and unproven drawback objection

Imported capital goods under Notification No. 32/2005-Cus. were required to be installed within six months or within an extended period allowed by the customs authority. Installation certificates issued after the import period supported a prima facie inference that extension had been granted, so alleged non-compliance with the notification did not by itself justify denial of interim relief. The Revenue's objection based on drawback was not decisive because drawback was not part of the show-cause notice and there was no categorical finding that it had actually been taken. The pre-deposit of duty and penalty was therefore dispensed with and stay was granted unconditionally.

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Issues: Whether the requirement of pre-deposit of duty and penalty should be dispensed with on the basis of a prima facie case that denial of CENVAT credit for alleged non-compliance with the import notification was not sustainable.

Analysis: The imported capital goods were covered by Notification No. 32/2005-Cus. dated 8-4-2005, which required installation within six months or within such extended period as the customs authority might allow. The record showed installation certificates issued by the Central Excise authority after the import period, supporting a prima facie inference of extension. The alleged availment of drawback was not part of the show-cause notice and there was no categorical finding by the authorities below that drawback had in fact been taken. On that basis, the objection raised by the Revenue was not treated as sufficient to deny interim relief.

Conclusion: The condition of pre-deposit of duty and penalty was dispensed with and the stay application was allowed unconditionally.

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