2019 (2) TMI 1931 - AT - Customs

Maintainability of appeal - non-compliance with the requirement of the pre-deposit - Section 129E of the Customs Act 1962 - HELD THAT - A bare perusal of Section 129E indicates that the Tribunal shall not entertain any Appeal unless the appellant has deposited 7 % of the duty in case where duty or duty and penalty are in dispute in pursuance of a decision or an Order appealed against. The second proviso stipulates that the provisions of this Section shall not apply to the stay Applications and Appeals pending before any Appellate Authority prior to the commencement of the Finance Act 2014. The amended provision of Section 129E of the Act came into force on 6 August 2014. It provides that Tribunal shall not entertain any Appeal unless the appellant has deposited 7 % of the duty in case where duty or duty and penalty are in dispute in pursuance of the decision appealed against. The second proviso makes the position absolutely clear as it provides that the provisions of Section 129E shall not apply to Stay Application and Appeals pending before any Appellant Authority prior to the commencement of the Finance Act 2014. In other words only those Appeals and stay Application which are pending before the Tribunal before 6 August 2014 would continue to be governed by the old provisions. The requirements set out in Section 129E of the Act as amended on 6 August 2014 have to be satisfied in regard to Appeals filed on or after 6 August 2014. The contention of the learned consultant for the appellant that the provisions of the amended provisions of Section 129E of the Act would apply to Appeals in which show cause notices were issued on or after 6 August 2014 cannot therefore be accepted - appellant has not made the requisite pre-deposit and has made a plea that the unamended provision of Section 129E under which there was a discretion with the Tribunal to waive the requirement of pre-deposit on certain conditions should be made applicable. Application dismissed.

Summary

Issues Involved:
1. Applicability of the amended Section 129E of the Customs Act, 1962.
2. Requirement of pre-deposit for filing an appeal.
3. Interpretation of the Finance Act, 2014 regarding pending appeals.

Issue-wise Detailed Analysis:

1. Applicability of the amended Section 129E of the Customs Act, 1962:
The core issue revolves around whether the amended Section 129E of the Customs Act, 1962, which mandates a pre-deposit of a certain percentage of the duty demanded or penalty imposed before filing an appeal, applies to appeals filed after its amendment on 6 August 2014. The appellant argued that since the show cause notice was issued before the amendment (on 6 February 2013), the unamended provisions should apply. However, the Tribunal held that the amended Section 129E applies to all appeals filed on or after 6 August 2014, irrespective of when the show cause notice was issued.

2. Requirement of pre-deposit for filing an appeal:
The appellant did not comply with the pre-deposit requirement under the amended Section 129E. The Tribunal emphasized that a plain reading of the amended Section 129E requires an appellant to deposit 7.5% of the duty or penalty in dispute before the Tribunal can entertain the appeal. The Tribunal cited the second proviso of Section 129E, which exempts only those appeals and stay applications pending before any appellate authority prior to the commencement of the Finance Act, 2014, from the pre-deposit requirement.

3. Interpretation of the Finance Act, 2014 regarding pending appeals:
The Tribunal referred to the Allahabad High Court’s judgment in Ganesh Yadav vs. Union of India, which upheld the constitutional validity of the amended Section 35F of the Central Excise Act, 1944 (para materia to Section 129E of the Customs Act). The High Court ruled that the amended provisions apply to all appeals filed after the amendment date. The Delhi High Court in Pioneer Corporation vs. Union of India also supported this view, emphasizing that the amended provisions govern appeals filed post-amendment, regardless of the date of the show cause notice. The Tribunal rejected the appellant's reliance on the Madras High Court’s decision in Fifth Avenue Sourcing Pvt. Ltd., noting that it had been reversed by a Division Bench.

Conclusion:
The Tribunal concluded that the appellant must comply with the pre-deposit requirement under the amended Section 129E. The appellant's application for waiver of pre-deposit was rejected. However, the Tribunal granted the appellant two weeks to fulfill the pre-deposit requirement, failing which the appeal would be dismissed. The appeal was scheduled for a compliance check on 15 March 2019.