1988 (8) TMI 109 - SC - Customs

Court Upholds Tribunal's Deposit Decision for Customs and Foreign Exchange Offenses

VIJAY PRAKASH D. MEHTA Versus COLLECTOR OF CUSTOMS (Preventive), BOMBAY

The court upheld the decision of the Appellate Tribunal to decline further reduction of the deposit required for appeal under Section 129E of the Act for ... Right of appeal as contemplated under Sections 129A and 129E of the Act - Held that:- It is not the law that adjudication by itself following the rules of natural justice would be violative of any right - constitutional or statutory without any right of appeal, as such. If the Statute gives a right to appeal upon certain conditions, it is upon fulfilment of those conditions that the right becomes vested and exercisable to the appellant. The proviso to Section 129E of the Act gives a discretion to the Tribunal in cases of undue hardships to condone the obligation to deposit or to reduce. It is a discretion vested in an obligation to act judicially and property. In the facts and circumstances of the case and all the relevant factors, namely, the probability of the prima facie case of the appellant, the conduct of the parties, have been taken into consideration by the Tribunal. The purpose of the section is to act in torrem to make the people comply with the provisions of law. Thus unable to accept the submission that there was improper rejection and non-consideration of material and relevant facts. If that is the position then the appeal has no merit and is accordingly rejected Issues:1. Appellants charged with alleged offenses under Customs Act and Foreign Exchange Regulation Act.2. Dispute over statements obtained under duress.3. Imposition of penalties by the Customs Authorities.4. Appellate Tribunal's decision on deposit of penalty for appeal under Section 129E of the Act.5. Appellants' contention of financial inability to deposit penalty.6. Applicability of legal provisions regarding appeal rights and deposit conditions.7. Judicial discretion in dispensing with deposit conditions.8. Comparison with previous legal judgments on appeal rights and deposit requirements.Analysis:1. The appellants were charged with offenses under the Customs Act and the Foreign Exchange Regulation Act upon their arrival in India in 1983. Allegations were made regarding the manner in which statements were obtained from the appellants by the Enforcement authorities, with claims of duress and the use of third-degree methods.2. While one appellant was discharged in the FERA proceedings due to lack of evidence, the other appellant's case was pending adjudication. However, penalties were imposed on both appellants by the Additional Collector of Customs based on alleged involvement in illegal foreign exchange activities, leading to appeals to the Appellate Tribunal under Section 129A of the Act.3. The Appellate Tribunal, after considering the appellants' financial situation and the penalty amount, declined to further reduce the deposit required for the appeal under Section 129E of the Act. The appellants argued their inability to deposit the amount, which they claimed would render their right of appeal illusory.4. The legal provision of Section 129E of the Act mandates the deposit of duty or penalty pending an appeal, with a provision for the Appellate Authority to dispense with the deposit in cases of undue hardship. The Tribunal's decision to reject the appellants' request for reduction was based on various factors, including the prima facie case against the appellants and the history of the appeals.5. The right to appeal is considered a statutory right that can be subject to conditions imposed by the law. The Tribunal's decision to uphold the deposit requirement was deemed a valid exercise of judicial discretion, ensuring compliance with legal provisions and safeguarding the interest of revenue.6. Previous legal judgments were cited to distinguish between substantive appeal rights and procedural requirements. The court emphasized that the right to appeal is not absolute and can be circumscribed by conditions set forth in the law, such as the deposit requirement under Section 129E of the Act.7. Ultimately, the court rejected the appellants' argument that the rejection of their appeal due to non-compliance with the deposit condition was improper. The decision was upheld based on a thorough consideration of relevant facts and legal provisions, ensuring the purpose of the law to compel compliance and uphold the statutory appeal process.