2024 (1) TMI 739 - AT - Customs

Tribunal Orders Re-evaluation of Appeal, Highlights Mandatory Pre-Deposit Requirement Under Customs Act for Appeal Validity.

The Tribunal remitted the case back to the Commissioner (Appeals) to reconsider M/s. RTI Spinners' appeal, acknowledging the amount paid during the ... Mandatory pre-deposit under Section 129E - treatment of payments made during investigation as pre-deposit - entertainment of appeals on fulfillment of pre-deposit requirement - remand for fresh consideration of compliance with pre-depositMandatory pre-deposit under Section 129E - treatment of payments made during investigation as pre-deposit - Whether the duty amount paid during investigation can be counted towards the 7.5% mandatory pre-deposit required by Section 129E so as to permit the appeal to be entertained. - HELD THAT: - The Tribunal found that an amount paid by the appellants during investigation had been remitted to the department and appropriated towards the total duty liability. Relying on the principle reflected in Circular No. 984/08/2014-CE dated 16.09.2014 (as relied upon by the appellants), payments made during the course of investigation or audit prior to the date on which the appeal is filed are to be taken into account for the purpose of mandatory pre-deposit. Because the sum remitted during investigation has been appropriated to duty and stands remitted, it can be counted towards the 7.5% pre-deposit of the total duty involved, and the appeal should therefore have been entertained and decided on merits rather than being rejected for non-compliance of Section 129E. For these reasons the Tribunal remitted the matter to the Commissioner (Appeals) with a direction to consider the payment made during investigation as satisfying the pre-deposit requirement and to proceed to decide the appeal on merits. [Paras 4]Payment made during investigation to the department shall be considered towards the 7.5% mandatory pre-deposit and the appeal is to be entertained; matter remitted to Commissioner (Appeals) to reconsider accordingly.Mandatory pre-deposit under Section 129E - entertainment of appeals on fulfillment of pre-deposit requirement - remand for fresh consideration of compliance with pre-deposit - Whether the second appellant (Shri Sushil Ratanlal Garg) must make a separate pre-deposit and what direction should follow if he fails to do so. - HELD THAT: - The Tribunal held that, unlike the first appellant whose earlier payment could be counted towards the pre-deposit, the second appellant is required to make a separate pre-deposit of the duty or penalty as applicable before his appeal can be entertained. The Tribunal remitted the matter to the Commissioner (Appeals) to give the second appellant one final opportunity to deposit the mandatory amount and then proceed to decide the appeal in accordance with law. The Tribunal expressly recorded that failure by the second appellant to make the required pre-deposit would entail dismissal of his appeal. [Paras 4, 5]Remit to Commissioner (Appeals) to allow the second appellant a final opportunity to make the separate mandatory pre-deposit; non-deposit will result in dismissal.Final Conclusion: The Tribunal remits both matters to the Commissioner (Appeals): (i) to treat the duty remitted during investigation as satisfying the 7.5% pre-deposit for M/s RTI Spinners and to decide that appeal on merits; and (ii) to afford Shri Sushil Ratanlal Garg one final opportunity to make the separate mandatory pre-deposit, failing which his appeal shall stand dismissed. Issues involved: The appeal against the order of Commissioner (Appeals) regarding mandatory pre-deposit under Section 129E of the Customs Act, 1962.Summary:Issue 1: Lack of mandatory pre-deposit under Section 129E:The appellants, M/s. RTI Spinners and Shri. Sushil Ratanlal Garg, challenged the rejection of their appeals by the Commissioner (Appeals) due to the non-furnishing of mandatory pre-deposit of 7.5%. The appellants argued that they had already paid a sum towards Customs Duty during the investigation stage, which should have been considered as part of the mandatory deposit. However, the Commissioner (Appeals) dismissed their appeals without considering this payment. The Tribunal found that the duty paid amount had already been adjusted towards the total duty liability, and as per Circular No. 984/08/2014-CE, the deposit made during the investigation should be considered for the mandatory deposit. Therefore, the matter was remitted back to the Commissioner (Appeals) with directions to consider the amount paid during investigation towards the mandatory pre-deposit for M/s. RTI Spinners. However, Shri. Sushil Ratanlal Garg was required to make a separate pre-deposit for his appeal to be entertained.Issue 2: Compliance with Section 129E of the Customs Act, 1962:The Commissioner (Appeals) rejected the appeals for non-compliance with the provisions of Section 129E, which requires a mandatory pre-deposit before entertaining an appeal under Section 128. The Tribunal noted that despite repeated reminders and opportunities given, the appellants failed to produce proof of the required pre-deposit. Consequently, the Tribunal upheld the rejection of the appeals by the Commissioner (Appeals) for non-compliance with Section 129E.Conclusion:The Tribunal remitted the matter back to the Commissioner (Appeals) for reconsideration in light of the amount paid during investigation for M/s. RTI Spinners, while requiring a separate pre-deposit for Shri. Sushil Ratanlal Garg's appeal. The non-compliance with the mandatory pre-deposit would lead to the dismissal of the appeal. The decision was pronounced in the open court on 16.01.2024.