2007 (4) TMI 453 - AT - Customs

Summary

Issues:
1. Penalty imposed under Section 112 of the Customs Act.
2. Dismissal of appeal due to non-compliance with Section 129E of the Customs Act.
3. Consideration of modification application for pre-deposit.
4. Prima facie case against penalty imposed based on EXIM Policy violation.

Analysis:
1. The original authority had levied a penalty on the appellant under Section 112 of the Customs Act. The appellant appealed to the Commissioner (Appeals) and sought waiver of pre-deposit, which was denied, leading to the dismissal of the appeal for non-compliance with Section 129E of the Customs Act.

2. The appellant argued that they had sent a modification application for pre-deposit in response to the appellate Commissioner's direction, which was received before the pre-deposit deadline. The records confirmed the timely submission of the modification application, indicating that the appellant's response was available before the expiry of the pre-deposit period. The appellate authority should have considered this application before dismissing the appeal.

3. The appellate authority's failure to give the appellant an opportunity to be heard and to consider the modification application led to the setting aside of the impugned order. The appellant's submissions were supported by evidence, and it was deemed unfair to dismiss the appeal without proper consideration.

4. Upon further examination, it was found that the appellant had purchased goods in good faith from a supplier who had not been penalized. The violation of Para 5.4 of the EXIM Policy was in relation to the disposal of imported goods, and the appellant's procurement from a non-penalized supplier raised a prima facie case against the penalty imposed. Therefore, no pre-deposit was required for the fresh disposal of the appeal by the lower appellate authority.

5. The lower appellate authority was directed to reconsider the appellant's appeal on its merits, adhering to legal procedures and principles of natural justice, without insisting on any pre-deposit. The appeal was allowed by way of remand, ensuring a fair hearing for the appellant in accordance with the law.