Arguable customs dispute and confiscated goods justified waiver of duty pre-deposit and stay of penalty recovery pending appeal

Pending appeal, waiver of pre-deposit was considered appropriate where the dispute over eligibility to Notification No. 64/88-Cus. was arguable and the goods remained under confiscation without redemption. Because the hospital equipment had not been redeemed, deposit of duty was not directed at that stage. The penalty was waived and recovery stayed, with the matter fixed for early hearing.

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Issues: Whether waiver of deposit of the duty demand and penalty was warranted pending appeal, and whether recovery of the penalty should be stayed.

Analysis: The application concerned pre-deposit of duty and penalty arising from the alleged ineligibility to the benefit of Notification No. 64/88-Cus. dated 1-3-1988. The goods had already been ordered to be confiscated and had not been redeemed, so the question of depositing duty at that stage did not arise. Having regard to the arguable nature of the dispute and the fact that the goods were hospital equipment lying unused, the request for interim relief was considered fit for acceptance in part.

Conclusion: Deposit of the duty amount was not directed at this stage, the penalty amount was waived and recovery stayed, and the matter was listed for early hearing.

Final Conclusion: Interim relief was granted substantially in favour of the appellant, subject to the appeal being taken up for early hearing.

Ratio Decidendi: Where the dispute is arguable and the goods remain under confiscation without redemption, pre-deposit of duty may be deferred and recovery of penalty stayed pending appeal.

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