2015 (7) TMI 301 - HC - Customs

Waiver of pre deposit - Whether, Tribunal in passing order of two different amounts by way of predeposit and bank guarantee in the Stay Petition for waiver of predeposit of penalty amounts to non application of mind, self contradictory and therefore, unsustainable in law when the Directorate is already having seized Indian currency which was not confiscated and the foreign currencies could not have been seized through addendum without affording opportunity - Held that - In the order under challenge at more places than one the Tribunal has observed that the main appeal arising out of the adjudication dated 22.1.2010 and the subsequent addendum dated 15.2.2010 raises several questions of facts and law. After noting the rival contentions, the Tribunal in paragraph 7 has observed that no final view can be expressed at the stage of grant of stay but the grounds would require indepth consideration. Apart from the violation of principles of natural justice, the other aspects on merits also require deeper scrutiny. The Tribunal has observed that it is convinced that the appellant has an arguable case. In the circumstances, we do not think why the conditional order was passed. The direction to deposit 10% of the total amount of penalty and to furnish bank guarantee for the balance 90% of the sum adjudicated and demanded, in effect and in substance means denial of stay. This is clear from the conditions that have been imposed. Once the case is arguable and the Tribunal is required to consider several grounds and indepth, then we do not see justification for imposition of such conditions. - Stay granted.

Summary

Issues:
Interpretation of an interim order granting conditional waiver and stay in a case involving penalty amounts, violation of principles of natural justice, imposition of conditions for deposit and bank guarantee, and the justification for such conditions.

Analysis:
The High Court analyzed an interim order issued by the Tribunal in a case involving the waiver of penalty amounts. The Court noted that the Tribunal's order raised substantial questions of law regarding the application of mind and the contradictory nature of the order. The Court specifically highlighted the issue of the Tribunal passing orders for two different amounts through predeposit and bank guarantee, which was deemed unsustainable in law. The Court observed that the Tribunal's direction for conditional waiver and stay did not align with the prima facie conclusions reached, indicating inconsistency in the decision-making process.

Furthermore, the Court delved into the Tribunal's observations regarding the main appeal's complexity in terms of both facts and law. The Tribunal acknowledged the need for a detailed examination of the case, including aspects related to natural justice and merits. Despite recognizing the arguable nature of the appellant's case, the Tribunal imposed conditions for deposit and bank guarantee, which the High Court found unjustified. The Court emphasized that imposing such conditions effectively denied the appellant a stay, especially when the case required thorough consideration of various grounds and merits.

Ultimately, the High Court decided to allow the appeal, granting an unconditional waiver of the pre-deposit and stay during the appeal's pendency before the Tribunal. The Court refrained from expressing opinions on the case's merits but emphasized the need to remove the imposed conditions to ensure a fair and just process. The judgment concluded with the decision to allow the appeal without any costs, signaling a favorable outcome for the appellant in the legal proceedings.