2015 (7) TMI 748 - HC - Customs

Waiver of pre deposit - Evasion of duty - suppression of FOB value - Penalty u/s 114AA - Held that - Tribunal has committed no error. Firstly, against the total penalty demand of more than ₹ 10 crores, the Tribunal imposed condition of pre-deposit of merely ₹ 10 lacs which comes to just about one per cent of the amount. Secondly, in the earlier case, the penalty imposed was ₹ 25 lacs against which the Tribunal imposed the condition of pre-deposit of ₹ 1 lac. Merely because the allegations are common, the Tribunal is not bound to adopt the same figure irrespective of the quantum involved in each case. The condition of pre-deposit has some rational relation to the total demand confirmed by the adjudicating authority - Decided against assessee.

Summary

Issues:
Challenge to order imposing pre-deposit condition for appeal before Customs, Excise and Service Tax Appellate Tribunal under Customs Act.

Analysis:
The petitioner challenged an order by the Tribunal requiring a pre-deposit of &8377; 10 lacs to pursue an appeal and avoid penalty recovery under the Customs Act. Allegations included evasion of customs duty through suppression of FOB value and forming a conspiracy syndicate. The Commissioner confirmed duty demand and imposed penalties, including a &8377; 5.46 crores penalty on the petitioner. The Tribunal imposed the pre-deposit condition, which the petitioner contested as onerous.

The petitioner's advocate argued that the pre-deposit condition was excessive, citing a previous case where a lower pre-deposit was required. He contended that the Commissioner's order was based on retracted confessional statements and lacked justification for imposing such a high penalty on a transporter not directly involved in exporting goods.

The Court upheld the Tribunal's decision, stating that the pre-deposit amount of &8377; 10 lacs was reasonable considering the total penalty demand exceeding &8377; 10 crores. The Court emphasized that the pre-deposit amount was a small percentage of the total penalty and varied based on the specific case circumstances. It was deemed unnecessary to scrutinize the adjudicating authority's order details at the writ petition stage, as these matters would be addressed during the appeal process if the pre-deposit condition was met.

Ultimately, the Court dismissed the petition, affirming the Tribunal's decision on the pre-deposit condition for the appeal under the Customs Act.