2011 (6) TMI 653 - HC - Customs

Pre-deposit - towards the redemption fine - when the goods are under confiscation and not redeemed Held that - Tribunal has not had due regard to the fact that the Appellant is a charitable organisation which would face financial hardship by the order of deposit goods were seized the provisions of Section 129-E would mandate that the requirement of pre-deposit is not attracted. The Appellant has already deposited the amount of penalty imposed Appeal allowed by dispensing with the requirement of pre-deposit under Section 129-E of the Customs Act 1962

Summary

Issues:
1. Whether the Appellate Tribunal was right in directing the Appellants to pre-deposit amounts towards redemption fine and customs duty when the goods were under confiscation and not redeemed?
2. Whether the financial condition of the Appellants was considered before directing the pre-deposit?

Analysis:
Issue 1: The Appellants challenged the Appellate Tribunal's direction to pre-deposit amounts under Section 129E of the Customs Act, 1962, towards redemption fine and customs duty, despite the goods being under confiscation and not redeemed. The Tribunal had ordered the Appellant to deposit an amount of Rs. 5 lakhs. The Appellant argued that as per the show cause notice, the goods were seized before the pre-deposit requirement arose, and the penalty had already been paid. The High Court agreed with the Appellant, stating that the provisions of Section 129E did not apply in this scenario. The Court allowed the Appeal, dispensing with the pre-deposit requirement and emphasizing that the Appellant had already faced financial hardship due to the penalty imposed.

Issue 2: The Appellant further contended that being a charitable organization, the financial condition should have been considered before directing the pre-deposit. The Court acknowledged this argument, highlighting the Appellant's charitable nature and the potential financial burden. The Court's decision to dispense with the pre-deposit requirement under Section 129E took into account the Appellant's charitable status and the financial implications of the Tribunal's order. The judgment clarified that the questions of law were answered by allowing the Appeal and no costs were imposed.

In conclusion, the High Court's judgment in this case revolved around the Appellants' challenge to the Appellate Tribunal's direction for pre-deposit under Section 129E of the Customs Act. The Court considered the timing of the goods' seizure, the Appellant's charitable status, and the financial impact of the pre-deposit requirement in reaching its decision to dispense with the pre-deposit obligation.