2013 (12) TMI 404 - AT - Customs

Stay application - Penalty u/s 114(iii) - Confiscation of goods - Held that - Pre-deposit of redemption fine is not at all warranted while hearing the stay application and, therefore, the Commissioner (Appeals) was clearly in error when she directed pre-deposit of 50% of the redemption fine also. Further, in the facts and circumstances of the case, when the department itself took five years to initiate action, it is not understood how the pre-deposit of penalty could be ordered without hearing the case on merits. Accordingly, I set aside the impugned order and direct the lower appellate authority to decide the appeal on merits without insisting on pre-deposit of the dues adjudged against the appellant, after giving the appellant a reasonable opportunity of being heard - Stay granted.

Summary

Issues:
- Appeal against Order-in-Appeal No. 360-361/MCH/Addl/Export/2012 dated 04/07/2012.
- Confiscation of goods and penalty under Customs Act, 1962.
- Direction to make pre-deposit for appeal.
- Stay application related to redemption fine and penalty.

Analysis:
The case involved an appeal and stay application against Order-in-Appeal No. 360-361/MCH/Addl/Export/2012 dated 04/07/2012 issued by the Commissioner of Customs (Appeal), Mumbai Customs Zone -I. The appellant, M/s Aristo Exports, exported goods without obtaining a 'Let Export Order' and not including shipping bills in the EGM filed. A show cause notice proposing penalty and confiscation was issued. The Additional Commissioner of Customs confiscated the goods with an option to redeem on payment of a fine and imposed a penalty. The appellant appealed, but the lower appellate authority directed a pre-deposit of 50% of the total demand, which the appellant did not comply with, leading to dismissal of the appeal.

The appellant argued that the direction for pre-deposit of the redemption fine was unwarranted under the Customs Act relating to stay orders. It was contended that the error was committed by the steamer agent and shipping line, and the show cause notice was issued after a significant delay without alleging any mala fides against the appellant. On the other hand, the Revenue representative reiterated the lower authorities' findings.

The judge, after considering the submissions, noted that pre-deposit of redemption fine was not justified during the stay application. The delay in initiating action by the department raised questions about ordering pre-deposit of penalty without hearing the case on merits. Consequently, the judge set aside the impugned order and directed the lower appellate authority to decide the appeal on merits without insisting on pre-deposit, providing the appellant with a reasonable opportunity to be heard. The appeal was allowed by way of remand, and the stay application was accordingly disposed of.