Appellant cannot claim proviso benefit while enjoying reduced pre-deposit under substituted Section 129E Customs Act

The SC dismissed an appeal concerning pre-deposit requirements under Section 129E of the Customs Act, 1962. The appellant argued for relief under the second proviso, claiming the substituted provision should not apply to their case. The court held that since the Commissioner's order was passed after the 2014 substitution and the appeal was filed in 2017, the appellant was only required to pay the reduced amount under the substituted provision, not the full amount under the earlier version. The court found no merit in the appellant's contention seeking benefit of the proviso while being subject to the more favorable substituted provision.

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Issues:
Appeal against Tribunal's order under Section 129E of the Customs Act, 1962 - Compliance with pre-deposit requirement - Interpretation of Section 129E pre and post substitution.

Analysis:
The appellant's appeal against the Tribunal's order under Section 129E of the Customs Act, 1962 was rejected by the High Court due to non-compliance with the pre-deposit requirement. The appellant was intercepted while traveling in a train and was found carrying smuggled Gold from Bangladesh, resulting in a penalty of Rs. 75 lakhs imposed by the Commissioner of Customs. The Tribunal dismissed the appeal as the appellant failed to make the pre-deposit, leading to the High Court upholding the order.

The appellant argued that the demand for pre-deposit was not warranted in law, citing the provisions of Section 129E before and after the substitution. The appellant contended that the substitution of Section 129E was made after the incident in 2013, and thus, the earlier provision should apply. Under the substituted provision, a fixed percentage of the disputed amount needed to be deposited, unlike the previous requirement of depositing the entire disputed amount.

The Court analyzed the changes brought about by the substitution of Section 129E, highlighting the reduction in the deposit amount from 100% to 7.5% under the new regime. The discretion previously available to the appellate body to scale down the pre-deposit was removed in the new provision. The Court referred to the case law on undue hardship to interpret the requirement of pre-deposit in the context of the appellant's case.

The legislative intent behind the substitution of Section 129E was to limit the total amount demanded as pre-deposit to Rs. 10 crores, providing relief to appellants. The Court clarified that the appellant could not avail the benefit of the discretionary power under the proviso of the substituted provision since the appellant was only required to pay the fixed percentage as per the new provision. The Court extended the period for complying with Section 129E by two months in the interest of justice, but ultimately dismissed the appeal.

In conclusion, the judgment clarified the application of Section 129E before and after the substitution, emphasizing the legislative changes aimed at reducing the pre-deposit amount and removing the discretionary power of the appellate body to scale down the deposit.

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