Conditional duty exemption and Net Foreign Exchange compliance determined denial of stay and partial pre-deposit relief.

Eligibility for concessional duty depended on proof of compliance with the condition of achieving positive Net Foreign Exchange, and the burden lay on the appellant to establish that entitlement. The later five-year computation regime was held inapplicable because it came into force in 2008, while the demand related to 2003-04 and 2004-05. The natural justice objection was rejected for interim relief purposes because the dispute concerned eligibility for exemption rather than a procedural defect warranting stay. No prima facie case was made out for waiver of pre-deposit or interim stay, and pre-deposit of 50% of the confirmed duty was directed.

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Issues: Whether the appellant was entitled to waiver of pre-deposit and interim stay pending appeal in view of its claim that it had achieved the required positive Net Foreign Exchange and that the demand was vitiated by breach of natural justice.

Analysis: The appellant sought the benefit of the concessional duty notification on the footing that positive Net Foreign Exchange had been achieved and that the later communication from the Development Commissioner could not be used without prior notice. The record showed, however, that the Development Commissioner had earlier indicated non-fulfilment of the Net Foreign Exchange condition and had requested recovery of duty. The exemption was conditional upon achievement of positive Net Foreign Exchange, and the burden lay on the appellant to establish compliance with that condition. The plea based on the later five-year computation regime was held inapplicable because that amendment came into force only in 2008, whereas the demand related to 2003-04 and 2004-05. The reliance on natural justice was rejected for interim relief purposes because the issue was the appellant's eligibility to claim exemption, not a procedural defect of the kind warranting stay.

Conclusion: The appellant was not found to have made out a prima facie case for waiver of pre-deposit or stay; a pre-deposit of 50% of the confirmed duty was directed, with the balance stayed on compliance.

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