2024 (1) TMI 739 - AT - Customs

Rejection of appeal under Section 129E of CA - lack of mandatory pre-deposit of 7.5% - proof of mandatory pre-deposit had not been furnished - HELD THAT - It is an agreed fact that as against total demand of Rs. 48,83,697/- amount of Rs. 7,81,861/- had been paid by the party and only differential duty of Rs. 41,01,836/- was payable by them. It is therefore clear that during the course of investigation Rs. 7,81,861/- was actually paid by the appellants which has been appropriated towards total duty of Rs. 48,83,697/-. Since, the aforesaid amount already stands remitted to the department, therefore, same can be counted towards 7.5% of total duty involved of Rs. 48,83,697/- and appeal on merits could have been maintained and decided by the Commissioner (Appeals). Since, the present order passed by the Commissioner (Appeals) is not on merits but it has dismissed the appeal under Section 129E, the matter remitted back to Commissioner (Appeals) with direction that aforesaid amount of Rs. 7,81,861/- be considered towards 7.5% of mandatory pre-deposit and appeal entertained accordingly. Matters are accordingly remanded back.

Summary

Issues involved:
The appeal against the order of Commissioner (Appeals) regarding mandatory pre-deposit under Section 129E of the Customs Act, 1962.

Summary:

Issue 1: Lack of mandatory pre-deposit under Section 129E:
The appellants, M/s. RTI Spinners and Shri. Sushil Ratanlal Garg, challenged the rejection of their appeals by the Commissioner (Appeals) due to the non-furnishing of mandatory pre-deposit of 7.5%. The appellants argued that they had already paid a sum towards Customs Duty during the investigation stage, which should have been considered as part of the mandatory deposit. However, the Commissioner (Appeals) dismissed their appeals without considering this payment. The Tribunal found that the duty paid amount had already been adjusted towards the total duty liability, and as per Circular No. 984/08/2014-CE, the deposit made during the investigation should be considered for the mandatory deposit. Therefore, the matter was remitted back to the Commissioner (Appeals) with directions to consider the amount paid during investigation towards the mandatory pre-deposit for M/s. RTI Spinners. However, Shri. Sushil Ratanlal Garg was required to make a separate pre-deposit for his appeal to be entertained.

Issue 2: Compliance with Section 129E of the Customs Act, 1962:
The Commissioner (Appeals) rejected the appeals for non-compliance with the provisions of Section 129E, which requires a mandatory pre-deposit before entertaining an appeal under Section 128. The Tribunal noted that despite repeated reminders and opportunities given, the appellants failed to produce proof of the required pre-deposit. Consequently, the Tribunal upheld the rejection of the appeals by the Commissioner (Appeals) for non-compliance with Section 129E.

Conclusion:
The Tribunal remitted the matter back to the Commissioner (Appeals) for reconsideration in light of the amount paid during investigation for M/s. RTI Spinners, while requiring a separate pre-deposit for Shri. Sushil Ratanlal Garg's appeal. The non-compliance with the mandatory pre-deposit would lead to the dismissal of the appeal. The decision was pronounced in the open court on 16.01.2024.