2016 (3) TMI 340 - HC - Customs

Seeking waiver of pre-deposit of duty - Section 129E of the Customs Act - Appellant was ordered to make pre-deposit of duty but it unable to do so results in refusal to grant further extension - Held that - as the goods worth for more than the said amount of pre-deposit i.e. ₹ 5 Lacs is in the custody of the Department, no further condition of pre-deposit can be imposed under Section 129E of the Customs Act. Therefore, by taking into account the appellant s plea of financial hardship the condition of pre-deposit is deleted. - Decided in favour of appellant

Summary

Issues:
1. Whether the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) correctly required the appellant to make a pre-deposit of duty or seek a waiver thereof.
2. Whether the Tribunal's refusal to grant an extension and subsequent dismissal of the appeal for non-compliance with the pre-deposit requirement was justified.
3. Whether the condition of pre-deposit can be imposed when the imported goods are already in the custody of the Customs Department.
4. Whether the Tribunal's decision to delete the pre-deposit condition and allow the appeal to be heard on merits was appropriate.

Analysis:
1. The appellant, a partnership firm, filed an appeal before CESTAT against the Commissioner of Customs' judgment. The Tribunal required a pre-deposit of Rs. 5 Lacs under Section 129E of the Customs Act, failing which the appeal was dismissed. The appellant sought waiver, citing the goods' custody with the Customs Department.
2. The appellant argued that no further pre-deposit condition should be imposed since the imported goods were already in Customs custody, relying on the Supreme Court's decision in Bhavya Apparels Pvt. Ltd. v/s. Union of India. The respondent's counsel contended that the Tribunal's decision was justified considering the duty, interest, and penalty involved.
3. The Court, after considering the value of the goods in custody and the appellant's financial hardship plea, deleted the pre-deposit condition. The Tribunal was directed to hear the appeal on merits, and the appellant was prohibited from seeking the goods' release until the appeal's decision.
4. The tax appeal was disposed of with the deletion of the pre-deposit condition and directions for further proceedings. The Court's decision to allow the appeal to be heard on merits without the pre-deposit requirement was based on the specific circumstances of the case and the goods' value already in the Customs Department's custody.