2014 (12) TMI 1079 - HC - Customs

Waiver of pre deposit - Tribunal has directed the assessee to deposit an amount of ₹ 20,00,000 /- by way of pre-deposit - benefit of notification No.12 /2012 as amended under SI. No.123 - Reclassification of goods - Held that - Having regard to the overall facts of this case, it is not possible to state that the impugned order does not conform to the principles enunciated - As regards the decision of the Kerala High Court in Binani Zinc Ltd. v. Asst. Collector of Central Excise (1994 (10) TMI 74 - HIGH COURT OF KERALA AT ERNAKULAM) on which reliance has been placed on behalf of the appellant, the same turns upon the facts of the said case wherein though there was an arguable case, the Tribunal has directed pre-deposit of a huge amount as a condition precedent for the hearing of the appeal. In the present case, as noted hereinabove, the Tribunal had directed the appellant to pre-deposit a small fraction of the entire liability under the order-in-original and hence, the said decision would not be applicable to the facts of the present case. The decision of the Delhi High Court in the case of Sri Krishna v. Union of India (1998 (7) TMI 97 - HIGH COURT OF DELHI) also does not carry the case of the appellant any further inasmuch as in the facts of the said case, the petitioners therein were poor persons and were not in a position to deposit the amount as directed by the Tribunal and consequently would have been denied of the valuable right of their appeal being heard and decided on merits, whereas in the facts of the present case, it is not the case of the appellant that is not in a position to deposit the amount as directed by the Tribunal. Tribunal, while considering the appellant s application under section 129E of the Act, has exercised its discretion judicially. Under the circumstances, it is not possible to state that there is any legal infirmity in the impugned order so as to give rise to any question of law, much less a substantial question of law, so as to warrant interference - Decided against assesse.

Summary

Issues Involved:
1. Justifiability of pre-deposit requirement for appeal hearing.
2. Nature of the Tribunal's order being unreasoned and non-speaking.
3. Applicability of precedent cases to the present matter.
4. Consideration of undue hardship and safeguarding the interests of the Revenue.

Detailed Analysis:

1. Justifiability of Pre-Deposit Requirement for Appeal Hearing:
The appellant challenged the Tribunal's direction to deposit Rs. 20,00,000 as a pre-condition for hearing the appeal on merits. The appellant argued that an identical issue had been decided in their favor in the case of Tamil Nadu Newsprint & Papers Ltd. v. Commissioner of Customs, Tuticorin, which should have warranted a total waiver of the pre-deposit. The Tribunal, however, found the issue arguable and contentious, necessitating a pre-deposit to proceed with the appeal.

2. Nature of the Tribunal's Order Being Unreasoned and Non-Speaking:
The appellant contended that the Tribunal's order was unreasoned and non-speaking, as it did not delve into the merits of the case or the applicability of the Tamil Nadu Newsprint & Papers Ltd. decision. The High Court, upon review, found that the Tribunal had indeed considered the submissions and provided reasons for directing the pre-deposit. The order was not deemed non-speaking, as it referenced the Tamil Nadu Newsprint decision and justified the pre-deposit requirement.

3. Applicability of Precedent Cases to the Present Matter:
The appellant cited several precedents, including the Supreme Court's decision in Benara Valves Ltd. v. Commissioner of Central Excise and the Kerala High Court's decision in Binani Zinc Ltd. v. Asstt. Collector of Central Excise, to argue against the pre-deposit. The High Court noted that while the Tribunal did not explicitly discuss the Tamil Nadu Newsprint decision in detail, it had considered it implicitly by setting a relatively low pre-deposit amount. The High Court also distinguished the present case from Binani Zinc Ltd., where a large pre-deposit was required despite an arguable case.

4. Consideration of Undue Hardship and Safeguarding the Interests of the Revenue:
The Tribunal's discretion under Section 129E of the Customs Act was scrutinized, focusing on prima facie case, balance of convenience, and irreparable loss. The High Court found that the appellant did not demonstrate actual financial hardship but relied on having a strong prima facie case. The Tribunal had balanced the appellant's arguable case with the need to safeguard the Revenue's interests by requiring a modest pre-deposit.

Conclusion:
The High Court concluded that the Tribunal had exercised its discretion judicially and that the impugned order did not suffer from any legal infirmity. The appeal was dismissed, affirming the Tribunal's direction for a pre-deposit of Rs. 20,00,000 as a condition for hearing the appeal on merits.