2015 (2) TMI 1047 - HC - Customs

Waiver of pre deposit - notice requiring the petitioner to pre-deposit 7.5% of the duty confirmed against him - Held that - The requirement of pre-deposit of 7.5% of the duty or penalty, in cases where both have been imposed, as a pre-condition for maintaining the appeal before the Appellate Tribunal, is one that was introduced under the Customs Act with effect from 06.08.2014. As per the said condition, if an assessee pre-deposits the said amount, then the appeal itself is taken up for hearing by the Appellate Tribunal and there is no requirement of filing a further application for waiver of pre-deposit and stay pending disposal of the appeal. This has been clarified by the CBEC Circular No.984/08/2014 CX dated 16.09.2014. On a consideration of the statutory provisions therefore, I am of the view that the right of appeal granted by the statute is a conditional one and the conditions are not so onerous as to deprive the petitioner of an effective right of appeal. What is required to be deposited by the petitioner, as a condition for maintaining the appeal, is only a small percentage of the duty/penalty amount confirmed against him, and the said amount has to be refunded to the petitioner in the event of his succeeding in the appeal before the Appellate Tribunal. In that view of the matter, I am not inclined to interfere with the direction in Ext.P10 notice requiring the petitioner to pre-deposit 7.5% of the duty confirmed against him by Ext.P8 order, as a condition for maintaining the appeal before the Appellate Tribunal. - however, time period to make pre deposit is extended. - Decided in favour of assessee.

Summary

Issues:
1. Whether the petitioner is required to pre-deposit 7.5% of the duty confirmed against him as a condition for maintaining an appeal before the Appellate Tribunal.
2. Whether the condition of pre-deposit deprives the petitioner of the right of appeal granted by the statute.

Analysis:
1. The petitioner, aggrieved by an order confirming duty and penalties against him, challenged a notice directing him to pre-deposit 7.5% of the confirmed duty to maintain an appeal before the Appellate Tribunal. The court noted the statutory provision introduced in 2014 requiring pre-deposit of duty or penalty for appeals. The court found that the condition of pre-deposit is not onerous as it allows for a small percentage to be deposited, refundable if the appeal succeeds. The court cited a CBEC Circular to support this interpretation. It held that the right of appeal is conditional, and the condition is not unduly burdensome, thus declining to interfere with the pre-deposit requirement.

2. The court addressed the contention that the pre-deposit condition deprives the petitioner of the right of appeal. It emphasized that the amount to be deposited is a small percentage of the confirmed duty, refundable upon appeal success. Considering the financial hardship plea, the court extended the deadline for pre-deposit. It clarified that compliance by the extended deadline would be deemed satisfactory. The judgment upheld the pre-deposit requirement as a reasonable condition for maintaining the appeal, ensuring the petitioner's right to appeal is preserved without undue deprivation.