2024 (3) TMI 811 - HC - Customs

Adjustment of various deposits made by entities during the course of investigation - Section 129E of Customs Act, 1962 - HELD THAT - The CESTAT has in terms of the order impugned while taking note of the statutory position held that it is only in situations where the person or the entity seeking waiver/adjustment for the purposes of pre-deposit has itself tendered those amounts during the course of investigation, the issue of adjustment would not arise. It has further and in light of the express language of Section 129E of the 1962 Act found no justification to accede to the prayer made by the appellant. The CESTAT has found that while various deposits appear to have been made during the course of investigation, those amounts cannot be considered for the purposes of computing the pre-deposit amount since those deposits had been effected by different entities and individuals. Undisputedly, the depositors were not the appellants before the CESTAT. It was in view of the aforesaid that it came to conclude that amounts deposited by other entities cannot be reckoned towards pre-deposit. It has further observed that even if the entities which had made those deposits had chosen not to initiate any appeals, it would still be open for them to seek refund of those amounts. In light of the unambiguous wording of Section 129E, there are no justification to interfere with the view which the CESTAT ultimately took and stands reflected in the impugned order. Appeal dismissed.

Summary

Issues involved:
The validity of the order passed by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) regarding the rejection of an application for considering amounts deposited by different entities as payment of mandatory pre-deposit under Section 129E of the Customs Act, 1962.

Comprehensive Details:

1. The appellant sought adjustment of deposits made by entities during an investigation, where the appellant was either a Proprietor, Partner, or Director. The appellant argued that since the deposits were made and No Objection Certificates were furnished, they should be considered for the pre-deposit required by Section 129E of the Customs Act, 1962.

2. The CESTAT rejected the appellant's request for adjustment, stating that only amounts deposited by the person or entity seeking waiver/adjustment can be considered for pre-deposit. The CESTAT emphasized that deposits made by other entities cannot be reckoned towards the pre-deposit by the appellant, as per the express language of Section 129E.

3. The CESTAT clarified that if a person has deposited any amount, it cannot be set off against the liability of another entity. Therefore, the amounts deposited by different entities during the investigation cannot be considered for the appellant's pre-deposit. The CESTAT highlighted that those entities can seek refunds if they choose not to appeal.

4. The High Court, after considering the submissions, upheld the CESTAT's decision. It emphasized that the responsibility to comply with the pre-deposit requirement lies with the person desiring to appeal. The Court found no reason to interfere with the CESTAT's interpretation of Section 129E.

5. The Court agreed with the CESTAT that deposits made by various entities during the investigation cannot be counted towards the appellant's pre-deposit amount. Since the depositors were not appellants before the CESTAT, those amounts could not be considered for the appellant's appeal.

6. In conclusion, the High Court dismissed the appeal, stating that the CESTAT's decision was in line with the clear wording of Section 129E. The Court found no grounds to overturn the CESTAT's ruling on the matter.

Separate Judgement:
No separate judgment was delivered in this case.