2013 (11) TMI 860 - HC - Customs

Waiver of pre deposit - Appellant employee of the custom house agent - 50% of penalty already deposited - Held that - prima-facie appellant may not be entirely responsible for the infraction that has led to imposition of penalty. The appellant has already deposited 50% of the penalty in compliance with interim order - The appeal is accordingly disposed of by directing the Customs, Excises & Service Tax Appellate Tribunal, New Delhi, to accept 50% of the penalty as satisfaction of the condition of predeposit - Decided in favour of appellant.

Summary

Issues: Appeal against order directing deposit of entire penalty, appellant's liability for penalty, financial capability of the appellant, compliance with interim order, responsibility for the infraction.

Analysis:
1. Appeal against order directing deposit of entire penalty:
The judgment deals with an appeal against an order passed by the Customs, Excises & Service Tax Appellate Tribunal (CESTAT), New Delhi, directing the appellant to deposit the entire penalty of Rs.3.95 lakhs as a pre-deposit within four weeks. The appellant contested this order, arguing that as a mere employee of a custom house agent, they should not be held liable for the penalty.

2. Appellant's liability for penalty:
The appellant's counsel contended that the appellant being a mere employee of a custom house agent should not be held responsible for the penalty. The court, after hearing both parties, was prima facie satisfied that the appellant may not be entirely responsible for the infraction that led to the penalty imposition. This indicates a consideration of the appellant's role and level of involvement in the alleged violation.

3. Financial capability of the appellant:
Another aspect raised was the appellant's financial capability to deposit the penalty amount. The appellant claimed financial incapability to pay the entire penalty. However, the revenue's counsel argued that there was no evidence of financial distress on the appellant's part. Despite the appellant depositing 50% of the penalty in compliance with an interim order, the issue of financial capability was a significant point of contention.

4. Compliance with interim order:
It was noted that the appellant had complied with an interim order by depositing 50% of the penalty on a specified date. This compliance was considered during the court's assessment of the case and influenced the final decision regarding the satisfaction of the pre-deposit condition.

5. Responsibility for the infraction:
The court acknowledged that the appellant may not bear full responsibility for the violation that led to the penalty imposition. This recognition of shared responsibility or mitigating circumstances played a crucial role in the court's decision to direct the Customs, Excises & Service Tax Appellate Tribunal to accept 50% of the penalty as satisfaction of the pre-deposit condition, thereby disposing of the appeal.

In conclusion, the judgment reflects a detailed consideration of various factors such as the appellant's role, financial capability, compliance with orders, and level of responsibility for the violation. The decision to accept 50% of the penalty as sufficient pre-deposit showcases a balanced approach by the court in addressing the issues raised during the appeal.