2026 (2) TMI 680 - HC - Customs

Pre deposit requirement is mandatory for tribunal appeals; third party payments cannot be adjusted to meet another's statutory deposit obligation.

A writ under Article 226 cannot be used to impugn dismissal of an appeal for non fulfilment of the statutory pre deposit requirement; compliance with ... Statutory pre-deposit as condition precedent to preferring an appeal - maintainability of writ petition where an efficacious statutory remedy exists - no set-off or appropriation of payments made by a co-party against another party's pre-deposit obligation - separate liabilities of distinct parties under adjudication - condonation of delay and restoration of appeal by the Tribunal upon compliance with pre-deposit - HELD THAT:- It is the petitioner’s case that the order in original dated July 14, 2014 had been challenged by the company i.e. M/s. Beriwala Impex Private Limited before CESTAT and that during pendency of the appeal, CESTAT has allowed the said appeal by an order dated February 23, 2022 thereby holding that the entire proceeding initiated against the company was without jurisdiction. It is evident that earlier, when the matter had been taken up by the Hon’ble Division Bench, it had been submitted before the Hon’ble Division Bench on behalf of the petitioner that as it would not be possible for the petitioner to put in the statutory pre deposit and avail the statutory remedy therefore the petitioner should be permitted to challenge the order in original before this Court. Such contention of the petitioner was repelled and negated by the Hon’ble Division Bench by observing that “an appeal is a creature of statute and any condition imposed in the exercise of the right of appeal need necessarily be complied with to avail of such remedy”. Accepting such order of the Hon’ble Division Bench, the petitioner approached CESTAT and filed the appeal. However, the petitioner could not comply with the condition of pre deposit and such failure led to the dismissal of the petitioner’s appeal. That, in the considered view of the Court, cannot clothe the petitioner with any fresh right to approach the Writ Court and seek relaxation of condition of pre deposit in whatever manner. Furthermore, it is not the petitioner’s case that the company paid the duty subsequent to the order passed by the Hon’ble Division Bench and that being so, there is no change in circumstances also. The party continues to be at the same place and in the same position where the party was at the time when the Hon’ble Division Bench decided the petitioner’s appeal. Above all, there is no provision in the statute that permits any appropriation or adjustment of payments made by a party in terms of an order in original with statutory pre deposit required to be made by another person for the purpose of filing or maintaining such other person’s appeal. This Court is therefore unable to accede to the petitioner’s request. Writ petition dismissed for want of maintainability insofar as it challenges CESTAT's dismissal for non-fulfilment of statutory pre-deposit. Issues: Whether a writ petition under Article 226 is maintainable to challenge dismissal of an appeal by CESTAT for non-fulfillment of the statutory pre-deposit requirement and whether payments made by a third party (the company) can be appropriated or adjusted to satisfy the petitioner's statutory pre-deposit obligation.Analysis: The statutory framework prescribes a pre-deposit requirement for filing appeals before the Tribunal as embodied in Section 35F of the Customs Act, 1962; compliance with that statutory condition is a pre-requisite to the exercise of the right of appeal. An earlier Division Bench order declined to permit collateral constitutional relief and left the petitioner to avail the statutory appellate remedy. The petitioner's reliance on payments made by a separate entity does not alter the statutory pre-deposit requirement because the liabilities and payment obligations are distinct and no provision permits appropriation or adjustment of a third party's payments to satisfy another person's pre-deposit obligation. Where an appellate remedy is available and a statutory condition for filing an appeal exists, challenge by way of writ is not permissible in the absence of changed circumstances or a statutory basis for adjustment.Conclusion: The writ petition is dismissed; the petitioner's challenge to CESTAT's dismissal for non-fulfillment of the pre-deposit requirement is rejected and the petitioner cannot claim adjustment of the company's payments for the purpose of meeting the petitioner's statutory pre-deposit obligation.Ratio Decidendi: Compliance with the pre-deposit requirement under Section 35F of the Customs Act, 1962 is mandatory for maintaining an appeal before the Tribunal, and payments by a separate party cannot be appropriated to meet another person's statutory pre-deposit absent express statutory provision.