2015 (11) TMI 762 - HC - Customs

Validity of impuned order - Waiver of pre deposit - Held that - Tribunal did not set aside the order of the Commissioner (Appeals) to remand the matter. The Tribunal modified the pre-deposit condition imposed by the Commissioner (Appeals) and directed the Commissioner to dispose of the appeal. The order of the CESTAT, impugned in this appeal, can be treated as an order of remand only if the stay petition has been directed to be re-heard. Since the condition imposed by the Commissioner (Appeals) for the grant of stay was modified by the Tribunal, the Tribunal was obliged to direct the Commissioner (Appeals) to take up the appeal and decide on merits. - The original order of the Commissioner (Appeals) imposing a condition for the deposit of 50% of the demand was dated 8.5.2013. As against the said order, the appellant did not file an appeal before the CESTAT. Instead, the appellant went before the very same Commissioner (Appeals) and sought a modification. The Commissioner (Appeals) did not refuse to modify, after considering the merits. But, he simply refused to entertain the modification application on the ground that he had become functus officio. It was only as against this order, the appellant filed an appeal before the CESTAT. Therefore, the CESTAT was not obliged to go into this question. However, on the other question, the Tribunal took a lenient view and reduced the amount demanded by the Commissioner (Appeals) by 50%. Hence, the order of the Tribunal does not really call for any interference - however, Commissioner was not functus officio. - pre deposit amount reduced - Decided partly in favour of assessee.

Issues:
1. Appeal against order demanding duty under Customs Act
2. Application for stay and modification of stay order
3. Dismissal of modification application by Commissioner (Appeals)
4. Appeal before Tribunal and modification of stay order
5. Contention regarding power to impose conditions by higher authority
6. Mistake in Commissioner (Appeals) order leading to appeal dismissal

Analysis:
1. The appeals were filed against an order demanding duty under the Customs Act for the years 2000-2001 to 2005-2006. The appellant moved an application for stay along with the appeal before the Commissioner of Central Excise (Appeals).

2. The Commissioner (Appeals) directed the appellant to make a pre-deposit of 50% of the demanded amount. The appellant later sought modification of the stay order, arguing that duty payment should not be required when goods are bonded under section 129E of the Customs Act.

3. The modification application was dismissed by the Commissioner (Appeals) on the grounds of non-compliance resulting in automatic dismissal of the stay petition. This decision led to the appellant's appeal before the Tribunal.

4. The Tribunal, without delving into the merits, modified the Commissioner's order and directed the appellant to deposit a reduced sum in installments. Dissatisfied with this decision, the appellant filed further appeals.

5. The appellant contended that the higher authority did not have the power to impose conditions. The High Court rejected this contention, stating that the Tribunal modified the pre-deposit condition and directed the Commissioner to decide on the appeal's merits.

6. A mistake was noted in the Commissioner (Appeals) order, indicating that he had become functus officio before the deadline for compliance. The High Court highlighted this error and emphasized the need for a timely resolution of the issue.

7. Considering the circumstances, the High Court modified the order of the appellate Commissioner, directing the appellant to make an additional deposit within a specified period. The main appeal was to be taken up and decided promptly thereafter to conclude the prolonged legal matter.

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