2022 (9) TMI 226 - AT - Customs

Maintainability of appeal - deposit of the mandatory amount under section 129E of the Customs Act, 1962, not complied with - HELD THAT - From a bare perusal of section 35F of the Customs Act that after August 06, 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 35F on August 06, 2014 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. A Division Bench of Delhi High Court in M/S. VISH WIND INFRASTRUCTURE LLP, M/S. J.N. INVESTMENT TRADING CO. PVT. LTD. VERSUS ADDITIONAL DIRECTOR GENERAL (ADJUDICATION) , NEW DELHI 2019 (8) TMI 1809 - DELHI HIGH COURT examined the provisions of section 35F of the Central Excise Act, 1944 and held that every appeal filed before the Tribunal after the amendment made in section 35F of the Excise Act and section 129E of the Customs Act on 06.08.2014 would be maintainable only if the mandatory pre-deposit was made. The appellant has not made the pre-deposit. In view of the aforesaid decisions, it is not possible to permit the appellant to maintain the appeal without making the required pre-deposit - Appeal dismissed.

Summary

Issues Involved:
1. Compliance with the mandatory pre-deposit under Section 129E of the Customs Act, 1962.
2. Consequences of non-compliance with the pre-deposit requirement.
3. Tribunal's authority to waive the pre-deposit requirement post-amendment.
4. Judicial precedents on mandatory pre-deposit.

Detailed Analysis:

1. Compliance with the Mandatory Pre-Deposit Under Section 129E of the Customs Act, 1962:
The primary issue in this case revolves around the appellant's failure to comply with the mandatory pre-deposit requirement as stipulated under Section 129E of the Customs Act, 1962. The appellant did not deposit the necessary amount, which is a prerequisite for the Tribunal to entertain an appeal. The relevant portion of Section 129E states that an appellant must deposit seven and a half percent of the duty or penalty in dispute before filing an appeal, with a cap of ten crores.

2. Consequences of Non-Compliance with the Pre-Deposit Requirement:
The Tribunal repeatedly adjourned the matter to provide the appellant with opportunities to rectify the defects, including the pre-deposit requirement. Despite multiple notices and adjournments, the appellant neither appeared before the Tribunal nor complied with the pre-deposit mandate. Consequently, the Tribunal emphasized that non-compliance with Section 129E results in the appeal being non-maintainable.

3. Tribunal's Authority to Waive the Pre-Deposit Requirement Post-Amendment:
The judgment highlights that post the amendment on August 6, 2014, neither the Tribunal nor the Commissioner (Appeals) holds the power to waive the pre-deposit requirement. This amendment marked a significant shift from the previous regime, where the Tribunal could waive the pre-deposit if it deemed that such a deposit would cause undue hardship to the appellant. The amended Section 129E mandates the pre-deposit without exception, removing any discretionary power to waive or reduce the deposit.

4. Judicial Precedents on Mandatory Pre-Deposit:
The Tribunal referenced several judicial precedents to reinforce its decision:
- Narayan Chandra Ghosh vs. UCO Bank and Others: The Supreme Court emphasized that statutory rights to appeal could be conditioned, and unless the pre-deposit condition is fulfilled, the appeal cannot be entertained.
- Chandra Sekhar Jha: The Supreme Court reiterated that the amended provisions of Section 129E must be strictly followed, and no discretionary power exists to waive the pre-deposit.
- Dish TV India Limited vs. Union of India & Ors.: The Delhi High Court held that courts cannot waive the mandatory pre-deposit requirement as the statute itself provides significant relief by reducing the pre-deposit amount to 7.5% or 10%.
- M/s Vish Wind Infrastructure LLP vs. Additional Director General (Adjudication): The Delhi High Court affirmed that the Tribunal cannot entertain any appeal unless the mandatory pre-deposit is made, reinforcing the absolute bar imposed by the statute.
- Ankit Mehta vs. Commissioner, CGST Indore: The Madhya Pradesh High Court dismissed the writ petition, emphasizing that neither the Tribunal nor the courts have the authority to waive or reduce the pre-deposit requirement.

Conclusion:
The Tribunal concluded that due to the appellant's failure to comply with the mandatory pre-deposit requirement under Section 129E of the Customs Act, the appeal could not be entertained. The appeal was thus dismissed, reaffirming the statutory mandate and the judicial precedents that underscore the necessity of the pre-deposit for maintaining an appeal.