1984 (1) TMI 333 - AT - Customs

Summary

Issues Involved:
1. Non-compliance with the pre-deposit condition under Section 129-E of the Customs Act.
2. Legal consequences of failing to comply with the Tribunal's order regarding pre-deposit.
3. Interpretation of Section 129-E in relation to the dismissal of appeals.

Detailed Analysis:

1. Non-compliance with the pre-deposit condition under Section 129-E of the Customs Act:

The appellant was penalized Rs. 10 lakhs by the Collector of Customs, Ahmedabad, and sought a stay on the pre-deposit of this penalty while filing an appeal. The Tribunal, in its order dated 20-10-1983, directed the appellant to deposit Rs. 1 lakh and execute a personal bond for the remaining Rs. 9 lakhs within 30 days. The appellant failed to comply with this order, citing dire financial conditions and the impossibility of fulfilling the terms. Consequently, a show cause notice was issued to the appellant to explain why the appeal should not be rejected for non-compliance with Section 129-E of the Customs Act.

2. Legal consequences of failing to comply with the Tribunal's order regarding pre-deposit:

The appellant argued that non-compliance with the pre-deposit condition should not result in the dismissal of the appeal but should only affect the stay of recovery. The appellant's counsel, Shri Canteenwala, contended that neither Section 129-E of the Customs Act nor Rule 17(a) of the 1982 Appeal Rules provides for the dismissal of an appeal due to non-compliance with a stay order. He emphasized that the right to appeal, conferred by the Act, cannot be nullified by the non-deposit of the penalty amount.

3. Interpretation of Section 129-E in relation to the dismissal of appeals:

Section 129-E mandates the deposit of the duty or penalty as a precondition for hearing an appeal, with a proviso allowing the Tribunal to dispense with this deposit if it causes undue hardship. The Tribunal had partially waived the deposit requirement by directing the appellant to deposit only Rs. 1 lakh and furnish a bond for the balance. The appellant's failure to comply led to the issuance of a show cause notice.

The Tribunal examined whether Section 129-E empowers it to dismiss an appeal for non-compliance with the deposit requirement. The appellant's counsel cited a Bombay High Court decision, arguing that non-compliance should not bar the appeal from being heard on merits. However, the Tribunal found this case inapplicable, noting that the provisions of the Civil Procedure Code differ from those of the Customs Act.

The Tribunal referred to the Supreme Court's decision in Navinchandra v. Central Board of Excise and Customs, where it was held that non-compliance with the deposit requirement under Section 129(1) of the Customs Act (similar to Section 129-E) justifies the dismissal of an appeal. The Supreme Court clarified that while Section 129 provides a right of appeal, it also imposes an obligation to deposit the penalty, and failure to comply with this requirement allows the appellate authority to reject the appeal.

Conclusion:

The Tribunal concluded that the appellant's failure to comply with the order dated 20-10-1983, despite sufficient time being granted, warranted the dismissal of the appeal. Consequently, the Misc. Application was rejected, and the appeal was dismissed for non-compliance with the Tribunal's order and Section 129-E of the Customs Act.