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2008 (12) TMI 215 - HC - CustomsStay/Dispensation of pre-deposit - whether the appellant is not doing any gainful business and hence the direction for pre-deposit will lead to financial hardship to the appellant? - Held that - In the case on hand, the capacity of the appellant to pay the amount having been noticed and in the absence of any financial burden, it cannot be construed that there is an undue hardship for the appellant to resort to claim waiver of pre-deposit. Therefore, the decisions, relied upon by the appellant, are not applicable to the present case. The plea of the appellant for waiver of pre-deposit cannot be countenanced. However, with a view to give the appellant an opportunity, we afford a further time of 15 days to deposit the amount of ₹ 8.00 lakhs, as ordered by the learned single Judge, if not already deposited.
Issues Involved:
1. Violation of Duty Exemption Scheme. 2. Liability of the appellant for customs duty and penalties. 3. Requirement and waiver of pre-deposit under Section 129E of The Customs Act, 1962. 4. Financial hardship and undue hardship as grounds for waiver of pre-deposit. Detailed Analysis: 1. Violation of Duty Exemption Scheme: The appellant, a merchant engaged in exporting and importing goods, was granted an Advance Licence under the Duty Exemption Scheme. This allowed duty-free import of inputs subject to the condition of exporting a specified quantity of the resultant product. The appellant imported 80.534 MTs of Cassia under this scheme but faced allegations from the Directorate of Revenue Intelligence for violations, leading to a show cause notice demanding Rs. 38,91,449/- in duty. 2. Liability of the Appellant for Customs Duty and Penalties: The Commissioner of Customs, through Order-in-Original No. 13 of 1999, reduced the duty demand to Rs. 26,54,175/- and imposed penalties of Rs. 2.50 lakhs on the firm and Rs. 25,000/- on the Power of Attorney Holder. The appellant challenged this order before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), which further reduced the pre-deposit requirement to Rs. 13.00 lakhs. Subsequently, a single Judge of the High Court modified the pre-deposit amount to Rs. 8.00 lakhs. 3. Requirement and Waiver of Pre-Deposit under Section 129E of The Customs Act, 1962: Section 129E mandates the deposit of duty and interest or penalty pending appeal unless it causes undue hardship. The Tribunal and the single Judge reduced the pre-deposit amounts considering the appellant's financial condition but did not fully waive it. The court emphasized that pre-deposit is mandatory unless undue hardship is proven, and reducing the amount further would jeopardize revenue interests. 4. Financial Hardship and Undue Hardship as Grounds for Waiver of Pre-Deposit: The appellant argued financial hardship, citing various precedents where courts waived pre-deposits due to undue hardship. However, the court found no evidence of undue hardship or financial constraints. The court referred to Supreme Court judgments defining undue hardship as excessive hardship not warranted by circumstances. The appellant's capacity to pay was noted, and the court concluded that there was no undue hardship justifying a waiver. Conclusion: The court dismissed the writ appeal, affirming the requirement for the appellant to deposit Rs. 8.00 lakhs as ordered by the single Judge. The court granted an additional 15 days for the appellant to make the deposit, after which the Tribunal would hear the appeal on merits. The court emphasized safeguarding revenue interests while ensuring fair opportunity for the appellant.
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