2022 (3) TMI 1177 - AT - Customs

Maintainability of appeal - requirement of deposit of the required percentage of duty demanded before filing the appeal as contemplated under section 129E of the Customs Act, 1962 not complied with - HELD THAT - It would be seen from a bare perusal of section 129E of the Customs Act that after 6.8.2014 neither the Tribunal nor the Commissioner (Appeals) have the power to waive the requirement of pre-deposit, unlike the situation which existed prior to the amendment made in section 129E on 06.08.204 when the Tribunal, if it was of the opinion that the deposit of duty and interest demanded or penalty levied would cause undue hardship, could dispense the said deposit on such conditions as it deemed fit to impose so as to safeguard the interest of the Revenue. The Supreme Court in Narayan Chandra Ghosh vs. UCO Bank and Others 2011 (3) TMI 1478 - SUPREME COURT , examined the provisions contained in section 18 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 relating to pre deposit in order to avail the remedy of appeal. The provisions are similar to the provisions of section 129E of the Customs Act. The Supreme Court emphasised that when a Statue confers a right to appeal, conditions can be imposed for exercising of such a right and unless the condition precedent for filing appeal is fulfilled, the appeal cannot be entertained. The Supreme Court, therefore, held that deposit under the second proviso to section 18(1) of the Act, being a condition precedent for preferring an appeal, the Appellate Tribunal erred in law in entertaining the appeal. The Supreme Court also held that the Appellate Tribunal could not have granted waiver of pre-deposit beyond the provisions of the Act. The Madhya Pradesh High Court in ANKIT MEHTA VERSUS COMMISSIONER, CGST INDORE 2019 (3) TMI 1342 - MADHYA PRADESH also dismissed the Writ Petition that had been filed against the order of the Tribunal dismissing the appeal for the reason that the required pre-deposit was not made. The contention that was advanced before the Tribunal and before the Madhya Pradesh High Court was that the appellant was not in a position to make the pre-deposit due to financial constraints. The appellant has not made the pre-deposit and has filed an application seeking waiver because of financial constraints and for the reason that the appellant has a good case on merits - As the law relating to pre-deposit has been settled by the Supreme Court and the High Courts, it would also not be possible to accept the prayer made by the learned counsel for the appellant that the application should not be decided at this stage as the matter in the case of a co-noticee, after his plea for waiver of pre-deposit had been rejected by the Tribunal and the High Court had maintained the order of the Tribunal, is pending in Supreme Court. The application filed for waiver of pre-deposit is rejected - As the application has been rejected, the appeal stands dismissed.

Summary

Issues Involved:
1. Requirement of pre-deposit under section 129E of the Customs Act, 1962.
2. Authority of the Tribunal to waive the pre-deposit requirement.
3. Legal precedents and judicial interpretations regarding the pre-deposit requirement.

Detailed Analysis:

1. Requirement of Pre-Deposit under Section 129E of the Customs Act, 1962:
The appellant filed an appeal without depositing the required percentage of duty demanded as mandated under section 129E of the Customs Act. The appellant sought dispensation of the pre-deposit, claiming that the merits of the case justified such a waiver and that making the pre-deposit would cause grave harm, loss, and prejudice.

2. Authority of the Tribunal to Waive the Pre-Deposit Requirement:
The Tribunal examined section 129E of the Customs Act, which was amended on 06.08.2014. The amended section stipulates that neither the Tribunal nor the Commissioner (Appeals) has the power to waive the requirement of pre-deposit. Prior to the amendment, the Tribunal could dispense with the deposit if it deemed that the deposit would cause undue hardship, but this discretionary power was removed by the amendment.

3. Legal Precedents and Judicial Interpretations:
Several judicial precedents were cited to support the mandatory nature of the pre-deposit requirement:

- Narayan Chandra Ghosh vs. UCO Bank and Others: The Supreme Court emphasized that statutory conditions for appeal, such as pre-deposit requirements, must be fulfilled for the appeal to be entertained. The Tribunal cannot grant a waiver beyond the provisions of the Act.
- Chandra Sekhar Jha v. Union of India and Another: The Supreme Court upheld the Tribunal's rejection of an appeal due to non-compliance with the pre-deposit requirement, reinforcing that the new provisions do not allow for discretionary waivers.
- Dish TV India Limited vs. Union of India & Ors.: The Delhi High Court held that courts cannot waive the statutory pre-deposit requirement, as the law itself provides significant relief by reducing the pre-deposit amount to 7.5% or 10% of the duty.
- M/s Vish Wind Infrastructure LLP v. Additional Director General (Adjudication): The Delhi High Court reiterated that appeals filed after the amendment must comply with the mandatory pre-deposit requirement, and no court can direct otherwise.
- Ankit Mehta v. Commissioner, CGST Indore: The Madhya Pradesh High Court dismissed a writ petition against the Tribunal's order for non-compliance with the pre-deposit requirement, emphasizing that financial constraints do not justify a waiver.

The application for waiver of pre-deposit was ultimately rejected, and the appeal was dismissed due to non-compliance with the mandatory pre-deposit requirement. The Tribunal concluded that the law is clear and unambiguous, and neither the Tribunal nor the courts have the authority to waive the pre-deposit mandated by section 129E of the Customs Act.