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Issues: (i) Whether the earlier order directing cash deposit of part of the duty demand under section 129E of the Customs Act, 1962 should be modified on the ground of subsequent financial hardship; (ii) Whether the cash deposit directed by the Tribunal could be avoided or replaced by the continuing bond and guarantee arrangements, including in relation to the redemption fine.
Issue (i): Whether the earlier order directing cash deposit of part of the duty demand under section 129E of the Customs Act, 1962 should be modified on the ground of subsequent financial hardship.
Analysis: The material placed for modification did not justify interference with the earlier order. The claimed deterioration in financial position was not shown to be a genuine unforeseen change; the applicant had not fully disclosed its banking position at the earlier stage and had also used available facilities in the intervening period. The Tribunal treated liquidity as relevant to the exercise of discretion under section 129E and found no basis to revisit the pre-deposit directions.
Conclusion: The request for modification of the cash-deposit direction was rejected and the order requiring compliance was upheld, in favour of Revenue.
Issue (ii): Whether the cash deposit directed by the Tribunal could be avoided or replaced by the continuing bond and guarantee arrangements, including in relation to the redemption fine.
Analysis: The Tribunal distinguished between duty, which is subject to the statutory pre-deposit requirement, and redemption fine, which is a different matter arising from confiscation. It held that the earlier bond and guarantee arrangements did not bar a direction for cash deposit of the duty amount, and that the bond relating to redemption fine stood on a separate footing. The continuation of those securities did not require deletion of the cash-deposit condition.
Conclusion: The bond and guarantee arrangements did not entitle the applicant to deletion of the cash-deposit requirement, and this contention failed, in favour of Revenue.
Final Conclusion: The modification application was found to be without merit, and the earlier pre-deposit order was left undisturbed with time allowed only for compliance.
Ratio Decidendi: Relief under section 129E depends on a bona fide showing of undue hardship and relevant liquidity; absent a credible change in circumstances, the Tribunal may insist on cash deposit notwithstanding prior security arrangements, and redemption fine stands on a separate legal footing from the duty pre-deposit requirement.
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