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Issues:
1. Jurisdiction of Customs Authorities to initiate proceedings for violation of import license conditions. 2. Exercise of discretion by the Tribunal under the proviso to Section 129E of the Customs Act. 3. Consideration of relevant factors in directing deposit of duty and penalty pending appeal. 4. Prima facie case on merits as a relevant factor in dispensing with deposit requirements. 5. Financial circumstances of the appellant as a relevant factor in exercising discretion. Analysis: Issue 1: Jurisdiction of Customs Authorities The petitioner, an exporter of marine products, imported raw materials under the Duty Exemption Entitlement Scheme for packing marine products without paying customs duty. Customs Authorities alleged violation of license conditions and imposed duty and penalty. The petitioner contended that Customs had no jurisdiction to initiate proceedings for license violations. They cited a judgment from the High Court of Madras supporting their case. The High Court noted the importance of this jurisdictional issue and the pending appeal before a Division Bench. Issue 2: Exercise of Discretion by Tribunal The petitioner appealed the Customs order to the Tribunal under Section 129A of the Act. The Tribunal, in exercising discretion under the proviso to Section 129E, directed the petitioner to deposit a specific amount pending appeal. Despite the petitioner's financial constraints and plea for dispensation, the Tribunal ordered the deposit. The High Court observed that the Tribunal did not consider relevant factors and the petitioner's prima facie case on merits. Issue 3: Consideration of Relevant Factors The Tribunal's decision to order a deposit without proper consideration of the jurisdictional issue and the petitioner's financial position was deemed improper. The High Court emphasized that undue hardship should be a crucial factor in the Tribunal's decision-making process under the proviso to Section 129E. Issue 4: Prima Facie Case on Merits The High Court stressed the importance of a prima facie case on merits in dispensing with deposit requirements pending appeal. Citing precedents, the Court highlighted that a valid appeal right should not be defeated by undue financial burden, especially when there is a prima facie case for consideration on merits. Issue 5: Financial Circumstances of the Appellant The appellant's financial circumstances were considered a relevant factor in the Tribunal's decision. The High Court noted that the appellant lacked sufficient liquid resources to make the directed payment, emphasizing the importance of financial hardship in determining the necessity of deposit requirements. In conclusion, the High Court quashed the Tribunal's orders directing the deposit and dismissal of the appeal, emphasizing the improper exercise of discretion and failure to consider relevant factors. The Court directed the Tribunal to restore the appeal and dispose of it expeditiously on merits without insisting on further deposits, considering the petitioner's payment compliance and financial constraints.
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