2015 (10) TMI 2446 - HC - Customs

Failure to make pre-deposit of 7.5% to entertain appeal - SCN issued for non-fulfilment of export obligation - Appellant contended that amendment to Section 129E would not be applicable to them since SCN was issued prior thereto on 10th June 2014 and CESTAT erred in dismissing the appeal on account of non-compliance of amended Section 129E Held That - CESAT had to apply the second proviso to the amended Section 129 E since appeal was filed after 6th August 2014 - Section 35 F indicated that on and after the date of its enforcement an Assessee in appeal was required to deposit the stipulated percentage of duty and if it failed to do so, CESTAT shall not entertain the appeal - Appellant deposited a sum of ₹ 4,95,532 on 8th May 2015 which was admittedly not 7.5% of the demanded duty as confirmed by Commissioner of Customs (Export) Appeal dismissed Decided in favour of Respondent.

Summary

Issues:
1. Appeal against dismissal for failure to make pre-deposit under Section 129E of the Customs Act.
2. Applicability of the amended Section 129E to appeals filed before and after its enforcement.
3. Interpretation of the legal position regarding mandatory pre-deposit for CESTAT appeals.

Analysis:
1. The appeal was filed against the dismissal by the CESTAT due to the Appellant's failure to make a pre-deposit of 7.5% of the duty demanded under Section 129E of the Customs Act. The Appellant had been issued a show-cause notice for non-fulfillment of export obligations, leading to a demand of duty, interest, and penalty. The CESTAT dismissed the appeal on the grounds of non-compliance with the pre-deposit requirement.

2. The main contention was whether the amended Section 129E, which mandated a pre-deposit, applied to appeals filed before its enforcement. The Appellant argued that since the show-cause notice was issued prior to the amendment, the new provision should not apply. However, the Respondent cited the Allahabad High Court's decision, stating that the amended section applied to all appeals filed after its enforcement date.

3. The Court highlighted that both the Central Excise Act and the Customs Act were amended to include mandatory pre-deposit provisions. The Allahabad High Court's decision in Ganesh Yadav v. Union of India upheld the constitutional validity of the amendment. The Court emphasized that the amended Section 129E would apply to appeals filed on or after the enforcement date, requiring the specified percentage of duty to be deposited for appeal consideration.

4. The Court concurred with the Allahabad High Court's interpretation, stating that the amended Section 129E applied to all appeals filed after the enforcement date. In this specific case, the Appellant failed to deposit the required amount, leading to the dismissal of the appeal by the CESTAT. The Court found no substantial question of law and dismissed the appeal and pending application accordingly.