Conditional customs exemption and pre-deposit waiver turn on export obligation compliance and proven financial hardship.

Conditional customs exemption under Notification No. 30/97-Cus. depended on discharge of the export obligation within the prescribed time, and admitted non-fulfilment made the duty recoverable. In considering waiver of pre-deposit under Section 129E of the Customs Act, the materials on record did not establish such financial hardship as to justify a complete waiver. The appellants were therefore required to pre-deposit the duty for hearing of the appeal, while waiver of pre-deposit of penalty and stay of recovery were available only upon compliance.

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Issues: Whether waiver of pre-deposit under Section 129E of the Customs Act, 1962 could be granted where the appellants had not fulfilled the export obligation attached to the duty exemption and pleaded financial hardship.

Analysis: The exemption from customs duty under Notification No. 30/97-Cus. was conditional and required discharge of the export obligation within the prescribed time. The record showed admitted non-fulfilment of that obligation, and the benefit of exemption had therefore become recoverable. On the plea of financial hardship, the materials placed did not show an unsound financial position so as to justify complete waiver of pre-deposit.

Conclusion: The appellants were directed to pre-deposit the duty amount for hearing of the appeal, with waiver of pre-deposit of penalty and stay of recovery only upon compliance.

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