2018 (7) TMI 1804 - HC - Customs

Pre-deposit - furnishing of security in lieu of cash deposit - Held that - There being no provision for providing security for the purpose of maintaining the appeal on the basis of the waiver granted by the Tribunal and later modified by this Court we are not inclined to direct the respondent to accept the security in lieu of cash deposit - the appellant could be granted a further time of three months to raise the amounts - appeal disposed off.

Summary

Issues:
1. Interference with the judgment directing deposit amount.
2. Review application for further reduction of the deposit amount.
3. Offering property as security instead of cash deposit.
4. Precedents regarding interest of revenue protection.
5. Discrepancy in property valuation and market value for obtaining a loan.

Issue 1:
The appellant sought interference with the judgment of the learned Single Judge which directed a deposit of ?30,00,000/- instead of the ?50,00,000/- directed by the Tribunal. The Tribunal, based on a waiver application, found a prima facie strong case with respect to ?86,00,000/- and confined the pre-deposit to ?50,00,000/- against the total demand of ?1,96,57,499/-. The learned Single Judge, in an Original Petition, further reduced the deposit amount to ?30,00,000/-, which the appellant appealed against belatedly.

Issue 2:
The assessee, after paying ?10,00,000/- and depositing an additional ?5,00,000/-, filed an application for review seeking a further reduction in the deposit amount. The learned Single Judge rejected the review, leading to the belated appeal against the original judgment.

Issue 3:
The appellant proposed offering two properties valued at ?31,60,000/- and ?20,24,000/- as security in place of cash deposit. However, upon verification, the properties were found to have significantly lower valuations, with one property valued at ?5,32,874/- and the other at ?8,83,200/-. The Court declined to accept the properties as security due to discrepancies in valuation and the remote possibility of sale.

Issue 4:
The appellant argued that precedents, including those of the Hon'ble Supreme Court, only require protecting the interest of revenue without mandating actual cash deposits. However, the Court, considering the valuation discrepancies and the interest on revenue, did not find it appropriate to accept the proposed security in place of cash deposit.

Issue 5:
There was a discrepancy between the property valuation as stated by the appellant and the official web site's valuation. The Court noted that if the market value aligned with the appellant's projection, they could obtain a loan based on the security. However, since there was no provision for providing security instead of cash deposit as per the Tribunal's waiver and the Court's modification, the Court granted the appellant three months to raise the required amounts and comply with the learned Single Judge's judgment.

In conclusion, the Court closed the writ appeal, specifying that it would not be taken up and rejected until the three-month period for deposit compliance. Upon the deposit being made, the appeal would be considered on its merits.