Advance Licence export obligation default justified pre-deposit, with recovery of remaining duty and penalties stayed conditionally.

Non-fulfilment of export obligations under an Advance Licence scheme was treated as sufficient to justify a substantial pre-deposit at the stay stage, because the reason for the failure was immaterial and no extension of the export period was shown to have been sought or granted. The applicants also did not plead financial hardship. On that basis, the Tribunal required a pre-deposit as a condition for hearing the appeals and stayed recovery of the balance duty and penalties only subject to compliance with the deposit direction.

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Issues: Whether, in view of the admitted non-fulfilment of export obligations under the duty-free import scheme, the appellants were required to make a pre-deposit as a condition for hearing of the appeals and whether recovery of the remaining duty and penalties should be stayed.

Analysis: The applicants admitted that the export obligations under the Advance Licence scheme were not fulfilled. The reason for the failure was held to be immaterial for deciding liability at the stay stage, and no material was shown to establish that any extension of the export period had been sought or granted. The appellants also did not plead financial hardship. In these circumstances, the Tribunal directed a substantial pre-deposit as a pre-condition for hearing the appeals and granted stay only for the balance amounts.

Conclusion: The appellants were directed to deposit Rs. 1 crore within six weeks, and subject to that deposit, recovery of the balance duty and penalties remained stayed pending the appeals.

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