High Court reduces pre-deposit amount to alleviate financial burden on appellant.

The High Court modified the CESTAT's order, reducing the pre-deposit amount from Rs. 40,00,000 to Rs. 5,00,000 due to the appellant's financial constraints. The judges intervened to balance revenue protection and the appellant's hardship, accepting the reduced payment within five months. This decision allowed for the appeal to proceed while safeguarding revenue interests and acknowledging the appellant's inability to pay the original amount.

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Issues:
1. Appellant's challenge against the order to pay a pre-deposit of Rs. 40,00,000.
2. Applicability of Section 129-E of the Customs Act, 1962 for pre-deposit.
3. Consideration of hardship in waiving pre-deposit.
4. Dispute over the amount of pre-deposit.
5. Judicial interference in the matter.

Analysis:
The appellant contested the order by CESTAT directing a pre-deposit of Rs. 40,00,000, arguing an inability to make the payment due to financial constraints. The appellant referred to Section 129-E of the Customs Act, 1962, emphasizing the provision for dispensing with the deposit in cases of undue hardship, subject to safeguarding revenue interests. The appellant proposed a reduced pre-deposit of Rs. 5,00,000 within five months, asserting a strong case on merits.

In response, the respondent's counsel insisted on the mandatory nature of pre-deposit under the amended Section 129-E, suggesting a payment of 7½% of the duty demanded, amounting to Rs. 11,13,169 in this case. The judges noted the non-functioning status of the appellant and acknowledged various losses suffered, refraining from delving into the appeal's merits, as it falls under the Tribunal's jurisdiction. They recognized the undue hardship faced by the appellant in making the pre-deposit, concluding it would be burdensome.

In light of the arguments presented, the judges deemed it necessary to intervene. They accepted the appellant's offer of Rs. 5,00,000 as a reduced pre-deposit within five months, considering it a measure to safeguard revenue interests while alleviating the appellant's hardship. Consequently, the original pre-deposit demand of Rs. 40,00,000 was reduced to Rs. 5,00,000, with instructions for the CESTAT to proceed with the appeal post the deposit.

In conclusion, the High Court modified the CESTAT's order, emphasizing the consideration of undue hardship faced by the appellant, leading to the reduction in the pre-deposit amount. The judgment highlighted the balance between revenue protection and appellant's circumstances, ultimately allowing for a reduced pre-deposit and the continuation of the appeal process.

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