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2023 (1) TMI 198 - AT - CustomsApplication for waiver of pre-deposit amount under Section 129E of the Customs Act, 1962 - effect of amendment made in Section 129E of the Customs Act - 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 06.08.2014 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. The Supreme Court also held that the Appellate Tribunal could not have granted waiver of pre-deposit beyond the provisions of the Act. It will also be appropriate to refer to a decision of the Delhi High Court in DISH TV INDIA LIMITED VERSUS UNION OF INDIA AND ORS. 2020 (8) TMI 183 - DELHI HIGH COURT , wherein the requirement of pre-deposit under section 129E of the Customs Act, came up for consideration. The High Court held that when the Statue itself provided wavier of pre-deposit to the extent of 90% or 92.5% of the duty amount and made it mandatory to deposit 7.5% or 10% of duty amount, the Courts cannot waive this requirement of deposit. 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 - the application filed for waiver of pre-deposit is rejected - Application dismissed.
Issues Involved:
1. Waiver of pre-deposit under Section 129E of the Customs Act, 1962. 2. Tribunal's power to waive pre-deposit post-amendment of Section 129E on 06.08.2014. 3. Legal precedents regarding mandatory pre-deposit for maintaining an appeal. Detailed Analysis: 1. Waiver of Pre-Deposit Under Section 129E of the Customs Act, 1962: The appellant sought a waiver of the pre-deposit amount under Section 129E of the Customs Act, 1962, arguing that there was no evidence of any violation of the Customs Act and that they were financially incapable of making the pre-deposit due to the destruction of their factory. 2. Tribunal's Power to Waive Pre-Deposit Post-Amendment of Section 129E on 06.08.2014: The Tribunal examined the amended Section 129E of the Customs Act, which mandates that the appellant must deposit a certain percentage of the duty or penalty before filing an appeal. The Tribunal noted that post-amendment, neither the Tribunal nor the Commissioner (Appeals) has the power to waive this requirement. Prior to the amendment, the Tribunal had the discretion to waive the deposit if it deemed that the deposit would cause undue hardship, but this discretion was removed by the amendment. 3. Legal Precedents Regarding Mandatory Pre-Deposit for Maintaining an Appeal: The Tribunal referred to several legal precedents to support its decision: - Narayan Chandra Ghosh vs. UCO Bank and Others (2011) 4 SCC 548: The Supreme Court held that conditions for pre-deposit imposed by statute are mandatory and cannot be waived by the Tribunal. - Kotak Mahindra Bank Pvt. Limited vs. Ambuj A. Kasiwal & Ors (2021): Reiterated the principles laid down in Narayan Chandra Ghosh, emphasizing the mandatory nature of pre-deposit conditions. - Chandra Sekhar Jha: The Supreme Court rejected the appellant's contention that the pre-amendment provisions of Section 129E should apply, noting that the new provisions reduced the deposit requirement but removed the Tribunal's discretion to waive it. - Dish TV India Limited vs. Union of India & Ors (2020): The Delhi High Court held that courts cannot waive the mandatory pre-deposit requirement as the statute itself provides significant relief by reducing the deposit to 7.5% or 10%. - M/s Vish Wind Infrastructure LLP vs. Additional Director General (Adjudication), New Delhi (2019): The Delhi High Court emphasized that no court can direct an authority to act in violation of the law, reinforcing the mandatory nature of the pre-deposit requirement. - Diamond Entertainment Techno. P. Ltd. vs. Commissioner of CGST, Dehradun (2019): Supported the mandatory pre-deposit requirement. - Ankit Mehta vs. Commissioner, CGST Indore (2019): The Madhya Pradesh High Court dismissed a writ petition challenging the mandatory pre-deposit requirement, affirming that neither the Tribunal nor the courts have the power to waive or reduce the pre-deposit. Conclusion: The Tribunal concluded that the appellant had not made the required pre-deposit and, based on the aforementioned legal precedents, it was not possible to maintain the appeal without fulfilling this mandatory requirement. Consequently, the application for waiver of pre-deposit was rejected, and the appeal was dismissed.
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