2021 (12) TMI 1312 - HC - Customs

High Court Upholds Customs Act Pre-Deposit Rule, Grants Deadline Extension

CHANDRA SEKHAR JHA AND RANJAN KUMAR MISHRA Versus UNION OF INDIA & ANR.

The High Court upheld the Tribunal's decision requiring the mandatory pre-deposit under the Customs Act, dismissing the appeals. However, the Court ... Maintainability of appeal - seeking waiver of pre-deposit - it is claimed that both the appellants were only courier boys and they have no means to effect such huge amount of pre-deposit to enable them to prosecute the appeals before the Tribunal - Levy of penalty u/s 112(b) of the Customs Act, 1962 - smuggling - HELD THAT:- Section 129E of the Act deals with deposit of certain percentage of duty demanded or penalty imposed before filing the appeal; the provision states that the Tribunal shall not entertain any appeal if the appellant has not deposited required percentage of the duty in case where duty or duty and penalty are under dispute or penalty is in dispute, in pursuance of the decision or order appealed against - The second proviso to Section 129 E curves out an exception only in respect of appeals which were pending before the appellate authority prior to the commencement of Finance (2) Act of 2014. Admittedly, appeals filed by the appellants before the Tribunal are not covered under the second proviso. If that is so then there is no discretion vested with the Tribunal to waive the mandatory pre-deposit contemplated under the Act. Therefore, it is found that there is no error in the order passed by the Tribunal. Considering the submission of the learned Counsel for the appellants that the appellants are in indigenous circumstances, one opportunity is granted to the appellants to pay the mandatory pre-deposit not later than 25th February, 2022 - appeal dismissed. Issues:Appeal against imposition of penalties under Customs Act, 1962; Compliance with mandatory pre-deposit under Section 129E of the Act; Tribunal's discretion to waive pre-deposit; Appellants' contention of being only courier boys without means to pay pre-deposit; Tribunal's order upheld by High Court; Grant of one opportunity to appellants to pay pre-deposit.Analysis:The appeals before the Calcutta High Court were directed against two separate orders passed by the Customs, Excise and Service Tax Appellate Tribunal. The appellants had filed the appeal against a common order by the Commissioner of Customs imposing penalties under Section 112(b) of the Customs Act, 1962. The Tribunal dismissed the appeals as the appellants failed to comply with the mandatory pre-deposit requirement under Section 129E of the Act. The appellants contended that they were only courier boys and lacked the means to pay the pre-deposit, urging the Court to consider their circumstances and waive the payment. However, the High Court found that the Tribunal had no discretion to waive the mandatory pre-deposit, especially since the appeals were not covered under the exception provided in the second proviso to Section 129E.The High Court upheld the Tribunal's order, stating that there was no error in requiring the pre-deposit as mandated by the Act. The appeals were consequently dismissed. Despite this, considering the appellants' circumstances, the Court granted them one opportunity to pay the mandatory pre-deposit by a specified deadline. If the pre-deposit was made within the given time frame, the Tribunal would then hear the appeal on its merits. However, failure to comply with this order within the stipulated time would result in the automatic dismissal of the appeals without further reference to the Court. The stay applications were also directed to be dismissed, and the respondent was instructed to regularize their appearance in the proceedings.