Pre-deposit waiver for customs penalty granted where balance of convenience favoured applicants and revenue retained the seized gold.

Pre-deposit of penalties imposed under Section 112(a) of the Customs Act was waived during pendency of the appeal because the gold had already been ordered released after acceptance of the bill and the explanation of lawful purchase. The penalties were based on an allegation of aiding production of the bill, but the revenue continued to retain possession of the gold, creating a prima facie balance of convenience in favour of the applicants. Recovery of the penalty amounts was stayed pending disposal of the appeal.

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Issues: Whether pre-deposit of the penalty amounts imposed under Section 112(a) of the Customs Act was required to be waived and recovery stayed during the pendency of the appeal.

Analysis: The gold in question had been ordered to be released by the adjudicating authority after acceptance of the bill and the explanation regarding lawful purchase, while the penalties were imposed against the applicants on the allegation of aiding production of the bill. In these circumstances, and as the gold remained in the possession of the revenue, a prima facie balance of convenience was found in favour of the applicants.

Outcome: Waiver of the entire pre-deposit of penalty was granted and recovery thereof was stayed during the pendency of the appeal.

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