Prima facie case for waiver of pre-deposit and interim stay where records weakened clandestine clearance allegations

A prima facie case was found for waiver of pre-deposit and interim stay where the appellant's register showed production and recycling of broken biscuits, undermining the allegation of clandestine clearance at the interim stage. The record also indicated that broken biscuits were known to be excisable, so the claim of ignorance had limited force. However, the Tribunal considered the penalty to be disproportionate to the alleged offence and directed only a partial pre-deposit of the penalty, staying recovery of the balance during the appeals.

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Issues: Whether, in the facts of the stay applications, the appellants had made out a prima facie case for waiver of pre-deposit and stay of recovery of the duty and penalties demanded.

Analysis: The register produced by the appellant indicated production and recycling of broken biscuits, and the show cause notice had proceeded on the assumption that the register was a proven document. On that basis, the allegation of clandestine clearance of broken biscuits was not supported at the interim stage. At the same time, the record showed that broken biscuits were known to be excisable, and the claim of ignorance regarding sugar syrup did not carry much force. The Tribunal also noted that the quantum of penalty appeared disproportionate to the alleged offence.

Conclusion: A strong prima facie case was made out for waiver of pre-deposit of the duty and for stay of its recovery, while partial pre-deposit of the penalty was directed and the balance recovery was stayed during the pendency of the appeals.

Final Conclusion: The stay applications were disposed of by granting interim protection in part, with limited pre-deposit ordered only against the appellant company and complete waiver of pre-deposit for the connected penalty appeals.

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