2020 (9) TMI 351 - HC - Customs

Dismissal Upheld for Non-Compliance with Pre-Deposit Rule

The High Court of Madhya Pradesh upheld the dismissal of the appeal due to non-compliance with the mandatory pre-deposit requirement under Section 129E of ... Mandatory pre-deposit under Section 129E of the Customs Act, 1962 - dismissal of appeal for non-compliance with pre-deposit requirement - power to dispense with deposit on grounds of undue hardship - right to adjudication on merits upon compliance with pre-depositMandatory pre-deposit under Section 129E of the Customs Act, 1962 - dismissal of appeal for non-compliance with pre-deposit requirement - The appellate authority was justified in dismissing the appeal for non-compliance with the mandatory pre-deposit requirement under Section 129E of the Customs Act, 1962. - HELD THAT: - The Court examined Section 129E which requires deposit of the duty and interest demanded or penalty levied pending an appeal where the goods are not under customs control or where a penalty is imposed. The appellate authority dismissed the petitioner's appeal on the ground that the mandatory pre-deposit, as required by the provision, was not made. Having considered the statutory mandate and the facts before it, the Court held that non-compliance with the pre-deposit condition furnished a valid ground for dismissal of the appeal. The Court noted that the appellate forum is empowered, by proviso, to dispense with such deposit only where it is satisfied that deposit would cause undue hardship and may impose conditions to safeguard revenue; no such dispensation was recorded in the present case.Appeal rightly dismissed for failure to comply with the mandatory pre-deposit requirement under Section 129E.Right to adjudication on merits upon compliance with pre-deposit - power to dispense with deposit on grounds of undue hardship - Procedure to be followed if the petitioner makes the mandatory pre-deposit within the period directed by the Court. - HELD THAT: - While upholding the dismissal for non-compliance, the Court granted a conditional direction: if the petitioner makes the mandatory pre-deposit within thirty days from the date of the order, the appellate authority is required to admit and decide the appeal on merits in accordance with law. This direction acknowledges the appellate authority's obligation to consider applications for dispensing with deposit where undue hardship is shown, but provides the petitioner an opportunity to regularise the appeal by effecting the statutory deposit so that the merits can be addressed.If the petitioner deposits the required amount within thirty days, the appellate authority shall decide the appeal on merits in accordance with law.Final Conclusion: Writ petition dismissed; the appellate authority's order dismissing the appeal for non-compliance with the mandatory pre-deposit is upheld, subject to the petitioner making the statutory pre-deposit within thirty days, whereupon the appellate authority shall decide the appeal on merits. Issues Involved:Appeal against dismissal of appeal due to non-compliance of mandatory pre-deposit under Section 129E of the Customs Act, 1962.Analysis:The High Court of Madhya Pradesh heard a petition filed by the petitioner challenging the dismissal of their appeal dated 06/03/2020 and 15/07/2020 by the appellate authority. The petitioner had appealed against the order passed by the Joint Commissioner, CGST & Customs, Indore, which was dismissed due to non-compliance with the mandatory pre-deposit requirement under Section 129E of the Customs Act, 1962. Section 129E mandates that pending an appeal relating to duty, interest, or penalty, the appellant must deposit the demanded duty, interest, or penalty. The Court, after considering arguments from both parties, upheld the decision of the appellate authority to dismiss the appeal based on the non-deposit of the mandatory pre-deposit.The Court cited a previous judgment in Writ petition No.17662/2019 (Sanjay Kundra Vs. Union of India and Others) decided on 02/12/2019, where a similar view was taken regarding the mandatory pre-deposit requirement. The Court found no reason to interfere with the order of the appellate authority but provided an opportunity for the petitioner to make the mandatory pre-deposit within 30 days. It was clarified that if the pre-deposit is made within the specified time frame, the appellate authority would then proceed to decide the appeal on its merits in accordance with the law. The Court directed the issuance of a certified copy of the order as per the rules.In conclusion, the High Court of Madhya Pradesh upheld the dismissal of the petitioner's appeal due to non-compliance with the mandatory pre-deposit requirement under Section 129E of the Customs Act, 1962. The Court provided an opportunity for the petitioner to rectify the non-compliance by making the mandatory pre-deposit within 30 days, after which the appellate authority would proceed to decide the appeal on its merits.