2019 (5) TMI 1625 - HC - Customs

Benefit of reduced mandatory pre-deposit of Penalty amount - HELD THAT - The conduct of the appellant in not depositing the amount, and approaching the court, deserves to be frowned upon; at the same time, this court notices that according to the averments, the appellant was facing severe financial constrains as it has been subjected to some search and seizure process and its assets were also attached. It is stated, however, that the appellant is willing to deposit the entire mandatory amount (20% of the penalty) - Given the fact that, its appeal has not been adjudicated on merits but dismissed on the ground of failure to comply with the statutory requirement of mandatorily pre-depositing the amount, this court is of the opinion that the interest of justice requires that the request of the appellant be granted. The appeal would stand restored - application disposed off.

Summary

Issues involved:
1. Compliance with mandatory pre-deposit for pursuing an appeal before CESTAT.
2. Appellant's failure to fulfill the pre-deposit condition leading to appeal dismissal.
3. Appellant's financial constraints and willingness to deposit the mandatory amount.
4. Court's consideration of justice and decision to restore the appeal upon depositing 20% of the penalty.

Detailed Analysis:
1. The appellant had sought the benefit of a reduced mandatory pre-deposit to proceed with an appeal before CESTAT. The court had earlier allowed a deposit of 10% of the penalty within six weeks for the appeal to be heard. However, the appellant failed to comply with this condition, resulting in the dismissal of the appeal. The appellant then approached the court against CESTAT's order rejecting the appeal due to non-compliance with the pre-deposit requirement.

2. The court noted the appellant's conduct of not depositing the amount as required and approaching the court. Despite this, the court acknowledged the appellant's financial difficulties, including facing a search and seizure process with attached assets. The appellant expressed willingness to deposit the entire mandatory amount of 20% of the penalty. Since the appeal was dismissed solely on the grounds of non-compliance with the pre-deposit requirement, the court found it necessary to restore the appeal in the interest of justice.

3. Considering the circumstances, the court decided that upon the appellant depositing 20% of the penalty within eight weeks, the appeal would be restored. CESTAT would verify the compliance with this condition and proceed to hear and dispose of the appeal after giving notice to the parties and considering their contentions in accordance with the law.

4. In conclusion, the court disposed of the appeal and related applications by granting the appellant the opportunity to restore the appeal by fulfilling the mandatory pre-deposit requirement within the specified timeframe, emphasizing the importance of complying with statutory obligations while also considering the appellant's financial challenges.