2014 (12) TMI 312 - HC - Customs

Waiver of pre deposit - Tribunal asked the CHA to pre deposit of 50 Lacs - Held that - appellant was a Customs House Clearing Agent and his licence has been suspended for last four years. It was further submitted that the appellant being a Customs House Clearing Agent and not the importer, he was not in a position to pay ₹ 50 lacs, which was directed to be paid as a pre-deposit. We further observe that as per the order impugned before the tribunal, the appellant has been assessed and asked to pay customs duty of ₹ 67,29,000/- and penalty of similar amount has been imposed on him. Pursuant to the last order, the appellant has deposited ₹ 10 lacs. He has also filed his affidavit giving details of the investments made by him in the form of FDRs, saving bank accounts, bonds, securities, PPF account, including those of his spouse and children, who have not attained the age of majority. The appellant has deposited ₹ 10 lacs in terms of order dated 12th September, 2014. We have also gone through the affidavit filed by the appellant in terms of directions issued vide order dated 12th September, 2014. Spouse of the appellant is working and drawing salary for about ₹ 11 lacs per annum. Details of her FDRs and investments as well as details of FDRs and investments in the name of two children and the PPF account of the spouse have been indicated. It is stated that the appellant, his spouse and minor children do not own any immovable property. The appellant will deposit a further sum of ₹ 5 lacs as a pre- condition for hearing of the appeal - The appellant will also furnish unconditional bank guarantee of ₹ 22 lacs to the satisfaction of the Registrar of the Tribunal stating that the bank will pay the amount in case the appellant does not succeed before the Tribunal - Decided partly in favour of Appellants.

Summary

Issues:
1. Imposition of pre-condition of deposit for hearing the appeal on merits by the Customs, Excise and Service Tax Appellate Tribunal.

Analysis:
The High Court framed the substantial question of law regarding the Customs, Excise and Service Tax Appellate Tribunal's imposition of a pre-condition on the appellant for depositing a specific amount to hear the appeal on merits. The appellant, a Customs House Clearing Agent, had his license suspended for four years and was directed to deposit Rs. 50 lacs for hearing the appeal. The appellant had already paid Rs. 10 lacs and provided details of investments made by him, his spouse, and minor children. The High Court considered the appellant's circumstances, including the fact that he was not the importer but a clearing agent, and modified the pre-condition. The Court ordered the appellant to deposit an additional Rs. 5 lacs and furnish an unconditional bank guarantee of Rs. 22 lacs within four weeks. The Court emphasized that the modification aimed to provide a fair opportunity and protect the Revenue's interest without expressing any opinion on the merits of the case.

In conclusion, the High Court found the initial pre-condition of depositing Rs. 50 lacs for hearing the appeal on merits to be unjustified in the appellant's situation. By modifying the condition to a total deposit of Rs. 5 lacs and a bank guarantee of Rs. 22 lacs, the Court aimed to balance the interests of the appellant and the Revenue. The Court clarified that the modification did not reflect any opinion on the case's merits, leaving the Tribunal to independently assess and decide the matter. The appeal was disposed of based on the modified pre-condition and bank guarantee requirement, allowing the Tribunal to proceed with the case accordingly.