2015 (10) TMI 1534 - HC - Customs

Waiver of pre-deposit to entertain appeal under Section 128 Petitioner contends that the same were declined of the right to file appeal for non-compliance of Section 129E of the Customs Act - Revenue holds that Petitioners are liable of pre-depositing 7.5% of the penalty imposed for filing appeals Held That - Impugned order is set aside and Respondent is directed to consider the appeals without insisting upon the pre-deposit of 7.5% of the penalty Decision made in the case of Fifth Avenue Sourcing Private Limited v. Commissioner of Service Tax 2015 (7) TMI 391 - MADRAS HIGH COURT followed Decided in favour of the assessee.

Summary

Issues:
Challenging impugned order dated 29.5.2015 by Commissioner of Customs regarding pre-deposit requirement for appeals under Section 128 of Customs Act.

Analysis:
The judgment involves two writ petitions challenging the common impugned order passed by the Commissioner of Customs (Appeals-I), Chennai, regarding the requirement of depositing 7.5% of the duty demanded or penalty imposed for filing appeals under Section 128 of the Customs Act. The impugned order stated that the Commissioner (Appeals) would not entertain any appeal unless the appellant had made the necessary deposit following a decision or order by a lower customs officer. The appeals were dismissed for non-compliance with this provision as per Section 129E of the Customs Act.

The Senior Central Government Standing Counsel argued that the petitioners were obligated to comply with the pre-deposit requirement as the show cause notice was issued after the relevant amendment. However, the court, in a previous order dated 12.6.2015, clarified the issue of accrual of the right of appeal. It was held that the right of appeal becomes vested in the assessee when they file their return, initiating the assessment proceedings. The court emphasized that the crucial date for the accrual of the right of appeal is the initiation of assessment proceedings, not the final decision itself. As the returns were filed before the relevant amendment and the amendment was not retrospective, the appeals should be entertained without insisting on the pre-deposit requirement.

Consequently, the court set aside the impugned order and directed the respondent to consider the appeals on their merits without requiring the pre-deposit of 7.5% of the penalty amount. The writ petitions were disposed of accordingly, with no costs awarded.