2024 (3) TMI 650 - HC - Customs

Waiver of pre-deposit - Whether the Tribunal erred in law in dismissing the appeal for non-compliance of the deposit order, in view of the provisions of Section 129 (2A) read with proviso to Section 129E of the Customs Act, 1962? - HELD THAT - No doubt, Section 129E does not expressly provides for the rejection of appeal for non-compliance with the requirements regarding the deposit of penalty or duty but the provision makes it obligatory on the appellants to deposit the duty or penalty pending the appeal and if a party does not comply either with the main Section or with any order that may be passed under the proviso, the Appellate Authority is fully competent to reject the appeal for non-compliance with the provisions of Section 129E. Unless Section 129E is complied with, the Appellate Authority cannot proceed to hear the appeal on merits. Therefore, the logical consequence of failure to comply with Section 129E, is the rejection of appeal on that ground. The law on the subject is not res integra. If the statute gives a right to appeal upon certain conditions, it is upon fulfillment of those conditions that the right becomes vested and exercisable to the appellant. The proviso to Section 129E of the Act gives a discretion to the Tribunal in cases of undue hardships to dispense the obligation to deposit the duty/interest or penalty. Admittedly, in this case the application for waiver of pre-deposit was dismissed by the learned Tribunal and the writ petitions challenging the orders passed by learned CESTAT have already been dismissed by the High Court. Admittedly, appellants did not make compliance of pre-deposit order even thereafter and therefore learned Tribunal was constrained to dismiss the appeals. Thus, the question of law is answered holding that there is no error in the orders passed by learned CESTAT, thereby, dismissing the appeal for non-compliance of the deposit order dated 17.06.2009, as per the provisions of Section 129 read with proviso of Section 129-E of the Customs Act, 1962. The appeals are therefore dismissed.

Summary

Issues Involved:
The appeal challenges the final order of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) dismissing appeals related to duty drawback schemes and fraudulent exports to CIS countries.

Factual Background:
Appellants were engaged in exports under Duty Entitlement Pass Book Scheme and Drawback Scheme. Show Cause Notices were issued regarding erroneously sanctioned duty drawback amounts, leading to penalties and confiscation considerations.

Adjudication and Penalties:
Order-in-Original dated 30.09.2008 held the drawback amounts inadmissible, leading to recovery demands and penalties on the appellants and related individuals and entities.

Appeals and Dismissals:
Appellants appealed to CESTAT seeking waiver of pre-deposit, which was dismissed, leading to High Court petitions that were also dismissed. CESTAT subsequently dismissed the appeals due to non-compliance with deposit orders.

Challenging the Dismissals:
Appellants filed the present appeals under Section 130 of the Customs Act, questioning the dismissal based on non-compliance with deposit orders.

Legal Analysis and Conclusions:
Section 129E of the Customs Act, pre-amendment, required deposit of demanded duty or penalty pending appeal. Failure to comply allows the Appellate Authority to reject the appeal. Discretion to dispense with deposit exists in cases of undue hardship.

Judicial Precedent and Discretion:
The right to appeal is statutory and conditional, subject to compliance with deposit requirements. The Appellate Authority has discretion to waive deposits in cases of hardship.

Dismissal for Non-Compliance:
Given the dismissal of waiver applications and High Court petitions, the failure to comply with deposit orders led to the dismissal of appeals by CESTAT. The decision aligns with the provisions of Section 129 and the proviso of Section 129-E of the Customs Act.

In conclusion, the appeals challenging the dismissal for non-compliance with deposit orders were dismissed, as per the provisions of the Customs Act, 1962.