EOU exit order and quantified de-bonding duty justified waiver of pre-deposit and stay of recovery

Differential excise duty demand against an EOU was not treated as sustainable at the pre-deposit stage where the unit had already obtained a final exit order, the de-bonding duty had been quantified and paid, and the department had not objected to the exit. In the absence of any review of the Range Superintendent's proceedings or any challenge to the Development Commissioner's final exit order, the fresh demand lacked substance for interim relief purposes. Waiver of pre-deposit was granted and recovery of duty and penalty was stayed.

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Issues: Whether, in the absence of review of the Range Superintendent's proceedings and without any challenge to the Development Commissioner's final exit order, the department could enforce the demand for differential excise duty; and whether the appellants were entitled to waiver of pre-deposit and stay of recovery.

Analysis: The demand arose after the unit had obtained a final exit order from EOU status on the basis of proceedings in which the duty payable for de-bonding had already been quantified and paid. The order further recorded that the department had not objected to the exit. In these circumstances, the department's attempt to enforce a fresh demand, without first reviewing the earlier proceedings or appealing against the exit order, was found to lack substance at the stage of pre-deposit and stay.

Outcome: Waiver of pre-deposit was granted and recovery of the duty and penalty was stayed.

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