2015 (12) TMI 931 - HC - Customs

Waiver of pre-deposit - mandatory or not - Recovery of custom duty - Held that - Since there was only one show cause notice which resulted into one order of adjudication passed by the Commissioner, we wonder whether the petitioner was even obliged to file a separate appeal. Insofar as the petitioner is concerned, it received one show cause notice and was visited with one final order of adjudication. Its liability, therefore, was to file a single appeal challenging such order of the Commissioner. It may be for convenience and better appreciation of issues that the Tribunal insisted for separate two appeals. - when the petitioner merely re-presented the appeal which was already filed for the purpose of challenging the consolidated order of the Commissioner under both the laws, such filing of appeal must be seen as a continuation of the original proceedings and fresh presentation of the appeal would relate back to the original date of filing the appeal. The issue can be seen from another angle. If by the time the petitioner presented the fresh appeal within the time permitted and directed by the Tribunal, the period of limitation had expired, would such appeal be rejected as time-barred. It becomes clear that the amended section 129-E of the Customs Act with effect from 06.08.2014 would not apply to both the appeals of the petitioner which are pending before the Tribunal. The petitioner would, therefore, be governed by the original section 129-E as it prevailed prior to 06.08.2014. The petitioner had a right to seek waiver of predeposit. The Tribunal would, therefore, restore such appeal and decide the same in accordance with law, after first deciding the petitioner s application for waiver of pre-deposit. For such purpose, the impugned order is set aside - Decided in favour of assessee.

Summary

Issues:
- Interpretation of Section 129-E of the Customs Act before and after the amendment on 06.08.2014.
- Applicability of the amended provision of Section 129-E to pending appeals.
- Requirement of pre-deposit for appeals filed after the amendment.
- Continuation of original proceedings in case of separate appeals for Customs duty and penalties.
- Discretion of appellate authority to waive pre-deposit.

Analysis:

1. The judgment dealt with the interpretation of Section 129-E of the Customs Act both before and after the amendment on 06.08.2014. Prior to the amendment, an assessee could seek a waiver of pre-deposit before the appellate authority or the Tribunal entirely. However, post-amendment, the provision mandated a mandatory pre-deposit of a specific percentage of the duty or penalty, leaving no room for discretion to waive this requirement.

2. The main issue revolved around the applicability of the amended provision of Section 129-E to pending appeals. The Tribunal insisted on the mandatory pre-deposit of 7.5% of the duty and penalties for an appeal filed after the amendment. Failure to comply with this requirement led to the dismissal of the appeal solely on this ground.

3. The judgment addressed the requirement of pre-deposit for appeals filed after the amendment. The petitioner argued that the appeal challenging Customs duty and penalty, filed after the amendment, was a continuation of the earlier appeal filed before the amendment. The petitioner contended that the amended provision should not apply to appeals or stay petitions already pending when the section was amended.

4. The court discussed the concept of continuation of original proceedings in the case of separate appeals for Customs duty and penalties. The petitioner had initially filed a consolidated appeal against the order of the adjudicating authority, challenging both duties and penalties under the Customs and Central Excise Acts. The Tribunal directed the petitioner to file a separate appeal under the Customs Act, leading to the presentation of a fresh appeal on 11.08.2014.

5. The judgment deliberated on the discretion of the appellate authority to waive pre-deposit. It was observed that since the petitioner had only received one show cause notice resulting in a single order of adjudication, the requirement to file separate appeals was questionable. The court opined that the presentation of the fresh appeal should be viewed as a continuation of the original proceedings, and the petitioner should be governed by the original Section 129-E, allowing the right to seek a waiver of pre-deposit.

6. In conclusion, the court set aside the impugned order, directing the Tribunal to restore the appeal and decide it in accordance with the law, after considering the petitioner's application for a waiver of pre-deposit. The judgment emphasized the need to view the filing of the fresh appeal as a continuation of the original proceedings, ensuring the petitioner's rights under the pre-amended provision of Section 129-E.