2015 (2) TMI 32 - HC - Customs

Waiver of pre deposit - Whether on the facts and circumstances of the case, the second respondent Tribunal, viz., Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench, Chennai is right in holding that the appellant has not made out a prima facie case in his favour against the demand and therefore directing the appellant to pre-deposit a sum of ₹ 45 lakhs for the entertainment of the appeal. - Held that - Tribunal was benevolent in ordering pre-deposit of ₹ 45.00 lakhs, which comes to approximately 30% of the total amount demanded. It is seen that the Tribunal is consistently following the procedure of ordering 25% of the total demand in many cases. The grant of waiver of pre-deposit depends on the facts and circumstances of each case and the discretion is vested with the Tribunal to grant the same. Even assuming that the appellant had paid a sum of ₹ 27.00 lakhs, the same comes to only 17% of the total demand, which is not a substantial amount. Even the pre-deposit ordered by the Tribunal and the amount paid by the appellant, which comes to approximately ₹ 72,00,000/-, do not cover 50% of the total amount demanded. Since the appellant, at the threshold, did not show any documentary evidence showing prima facie case in their favour, much less financial hardship, we are not inclined to interfere with the order of the Tribunal. More over, the appellant had admitted the undervaluation of three bills of entry. Hence, the Tribunal is justified in ordering pre-deposit of ₹ 45.00 lakhs. - no question of law much less any substantial question of law arises for consideration - Decided against assessee.

Summary

Issues:
1. Whether the Tribunal was correct in ordering the appellant to pre-deposit a sum of Rs. 45 lakhs for the entertainment of the appeal?
2. Did the Tribunal err in not considering the financial hardships pleaded by the appellant and the amount already paid pending investigation?

Issue 1:
The appellant, an importer of self-adhesive tapes, faced allegations of misdeclaration of the value of goods imported, leading to a demand for differential duty and penalties. The Adjudicating Authority rejected the declared value and demanded Rs. 1,57,93,792/- along with penalties. The appellant paid Rs. 27,79,394/- during the investigation, which the Authority ordered to be adjusted. The Tribunal, after examining evidence including emails and statements, found the appellant involved in undervaluation and ordered a pre-deposit of Rs. 45,00,000/-. The High Court noted that the Tribunal's discretion in ordering pre-deposit is based on each case's merits. Despite the appellant's partial payment, it did not cover a substantial portion of the demand. The Court upheld the Tribunal's decision, as the appellant failed to provide evidence of a prima facie case or financial hardship, and had admitted to undervaluation.

Issue 2:
The appellant argued that the Tribunal overlooked the Rs. 27.79 lakhs already paid and contended that this indicated a prima facie case in their favor. However, the High Court found that the amount paid was only 17% of the total demand and did not meet the required threshold. The Court emphasized that the Tribunal's discretion in granting waivers is based on the specific circumstances of each case. Since the appellant failed to demonstrate a strong case or financial difficulties, the Tribunal's decision to order a pre-deposit of Rs. 45,00,000/- was deemed justified. Consequently, the Civil Miscellaneous Appeal was dismissed, and the appellant was advised to challenge any adverse orders following the appropriate legal procedures.