2015 (2) TMI 264 - HC - Customs

Penalty u/s 112 - Application of Section 129E - Held that - Present is a case where penalty has been levied under the order as quoted above. First circumstance in which reference to duty and interest and the factum that goods are not under the control of Customs Authority was not attracted in the present case. A plain reading of section 129E clearly attracts the facts of the present case. The judgment of the Apex Court in Bhavya Apparels 2007 (9) TMI 274 - SUPREME COURT OF INDIA was a case in which there was payment of duty as well, which facts have already been noted. - Single Judge in the impugned judgment had relied on the above judgment of Apex Court where as in the present case, order was only with regard to payment of penalty. There was no payment of duty involved. When the payment of duty is not involved, the question as to goods were in custody of the department looses its significance. Hence on the above facts the conclusion of the learned Single Judge cannot be sustained. We however, looking into the facts of the present case that the writ petitioner has deposited an amount of ₹ 10,000/-, though belatedly, which was directed by the Appellate Tribunal, and appeal has been reconstituted. We do not find it a fit case where this court may interfere with the discretion exercised by the learned Single Judge by directing reconstitution of the appeal and re-hearing the appeal. - Petition disposed of.

Summary

Issues:
1. Appeal against the judgment dated 18.2.2014 disposing of the writ petition.
2. Challenge to the order imposing a penalty under section 112 of the Customs Act.
3. Interpretation of section 129E of the Customs Act regarding deposit pending appeal.
4. Discretion of the Appellate Tribunal in dispensing with the deposit under section 129E.
5. Comparison of the present case with the judgment in Bhavya Apparels case.
6. Decision on whether the appeal should be reconstituted and heard.

Issue 1: Appeal against the judgment dated 18.2.2014 disposing of the writ petition.

The writ petition was filed against the judgment disposing of the appeal in Appeal No. 567/1985 before the Custom Excise & Gold (Control) Appellate Tribunal. The appellant sought a writ to direct the grant of leave to constitute a fresh appeal and to consider it within a short period. Additionally, the appellant requested the court to call for the records relating to the appeal and quash the order of penalty against which the appeal arose.

Issue 2: Challenge to the order imposing a penalty under section 112 of the Customs Act.

An order was passed imposing a penalty of &8377; 3,98,749.75 under section 112 of the Customs Act. The appellant failed to comply with the order to deposit an amount of Rupees Ten thousand, leading to the dismissal of the appeal in 1989. The writ petition challenged this order, arguing that section 129E should not be involved when goods are in the custody of revenue.

Issue 3: Interpretation of section 129E of the Customs Act regarding deposit pending appeal.

Section 129E mandates the deposit of duty, interest, or penalty pending appeal. The Appellate Tribunal, in this case, dispensed with the deposit subject to certain conditions. The appellant contended that section 129E was fully attracted, requiring the deposit. However, the court found that the order in question only pertained to the payment of a penalty, not duty, aligning with the provisions of section 129E.

Issue 4: Discretion of the Appellate Tribunal in dispensing with the deposit under section 129E.

The Appellate Tribunal had the power to dispense with the deposit under section 129E, which it exercised in this case. The court noted that the Tribunal had already permitted the appellant to deposit an amount of &8377; 10,000, and the appeal had been reconstituted and numbered.

Issue 5: Comparison of the present case with the judgment in Bhavya Apparels case.

The court differentiated the present case from the Bhavya Apparels case, emphasizing that the latter involved the payment of duty, unlike the penalty-only situation in the present case. The court concluded that the judgment in Bhavya Apparels was not directly applicable to the circumstances of the current case.

Issue 6: Decision on whether the appeal should be reconstituted and heard.

The court decided not to interfere with the discretion exercised by the learned Single Judge in directing the reconstitution of the appeal and re-hearing. The court held that since the appellant had belatedly deposited the required amount and the appeal had been reconstituted, the appeal should proceed to be heard in accordance with the law.

This detailed analysis of the judgment covers the various issues involved and the court's reasoning and conclusions on each matter, preserving the legal terminology and significant phrases from the original text.